FINANCIAL SECTOR THREATENED

While Mrs May is on her way to Northern Ireland for another attempt to reassure everybody she will eventually find a way out of the backstop conundrum, closer to home other problems are still bubbling just below the surface. The UK Trade Policy Observatory is a partnership between the University
 of Sussex and Chatham House, created just after the 2016 referendum to analyse trade policy after Brexit. They have produced a report (HERE) highlighting the slow burning fuse under the UK Financial sector. 

DON'T BOTHER ASKING YOU CAN'T HAVE IT - EU

We certainly live in strange times. Before the Chequers away day where the cabinet sub committee decided on its "three baskets" approach we had the EU commission publish a slide presentation specifically ruling it out. Today, Phillip Hammond (HERE) is expected to set out details of the government's position on the financial sector. We want a comprehensive special trade deal including access for our banks to the single market. Unfortunately, yesterday the French finance minister Bruno Le Maire told us this is not possible. The best we can expect is something called equivalence, a much reduced status which is hard to get and easy to lose.

THE JAPANESES ANGLE

Amidst the row going on inside the Tory party at the moment about the customs union and the single market, I did wonder how Nissan view it, considering they were given assurances last year by Greg Clark that we would have "frictionless" trade with the EU after Brexit. They cannot view tariffs or non tariff barriers with equanimity. Well, we are about to find out. The PM is to meet a whole delegation of serious Japanese investors (HERE) including Nissan, Honda and Toyota as well as pharmaceutical and financial businesses. 

RED LINES REINFORCED

The coming trade negotiations will be the oddest ever. David Davis is apparently planning to tell the EU that it will not be allowed to cherry pick the sectors of the UK economy that it wants included in any deal (HERE). The smaller, weaker party is setting out to reinforce the larger, dominant party's red lines. Both sides have now ruled out any cherry picking. It looks like we are either IN or OUT.

BREXIT AND THE BANKS

There is still a disconnect with reality in Downing Street. Within a day or so of Barnier specifically ruling out a trade deal that includes financial services, a spokesman for the PM tells reporters the government is confident of getting a deep and special partnership that will include a good deal for financial services (HERE).

PREDICTING THE PREDICTABLE

The PM was apparently discussing an increase in the divorce bill (HERE) yesterday. This is the one we were not going to pay but now it seems we are. Just one of the many U turns and climb downs that the government has had to slowly and painfully undertake. The Kings College blog has an item from Saturday setting out the predictable path the negotiations have taken up to now (HERE).

BANKS ARE WARNED AGAIN ABOUT BREXIT

London banks may have been under the impression that they can get away with brass plate operations in the EU after Brexit, in spite of being told some time ago that this is not acceptable. Now the president of the European Central Bank, Mario Draghi, has spelled it out (HERE) that risk has to be properly managed inside the EU.

JEREMY BROWNE - Paints a gloomy picture for the financial services sector

Jeremy Browne was a former Liberal MP and minister of state in the coalition government of 2010-15 but was appointed as a special representative of the City of London Corporation to provide a voice for the financial services sector in the capital (HERE). He has apparently written a memo to 350 executives at financial firms in The City following meetings in Brussels last week. The memo has been leaked to The Telegraph (HERE).

FRANCE AND THE BANKS

A former LibDem minister, Jeremy Browne, has given an interview following visits to the EU capitals to discuss financial services as an envoy of The City (HERE) and has discovered that France is trying to steal banking and financial business from us. I am surprised he is shocked. What did he think was going to happen?