Govt minister predicts City will lose passporting

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Trade Minister Mark Garnier has confirmed that the UK will probably lose passporting in its Brexit negotiations, but has argued the Government could negotiate a “special hybrid” that is better than equivalence.

“What we are not trying to do is fit into an existing box. We are trying to create a new model,” Garnier told Bloomberg.

Garnier, who is also government envoy for financial services, concedes equivalence would be viewed with suspicion by the City because access can be withdrawn at 30 days’ notice.

“If we can create a special hybrid version of that, with a better version of equivalence or a different version of passporting, then that’s what we will try to achieve.”

Garnier admitted this would mean the UK was likely to have to adopt EU financial regulation.