EU needs rules to protect it from UK risk

The European Union's Brexit negotiator Michel Barnier says the EU would need "special vigilance" in letting British financial firms access the bloc because of the large risk London could pose to the EU's financial stability.

Responding to a report in the Guardian which said he had told EU politicians that he wanted a special deal to maintain EU firms' access to the City of London, Barnier tweeted: "When asked on equivalence I said: EU would need special vigilance on financial stability risk, not special deal to access the City."

An EU spokesman said the Guardian report did "not correctly reflect" Barnier's comments to a closed-door meeting with members of the European Parliament last week.

EU officials said the point Barnier was making when asked about Brussels' willingness after Brexit to recognise British financial regulations as "equivalent" in rigour to those of the EU was that, as a lot of EU business was likely to still pass through the City, EU equivalence rules would have to be much more tightly drafted compared to those for smaller centres.