The Chief executive of the Financial Conduct Authority has put pressure on the UK and EU to decide on a deal for the transition deal within the next two months.
Andrew Bailey has said that the lack of a stable deal will result in mutually damaging instability. Bailey said there was nothing in the way of both parties making progress and it should be the current priority.
Speaking at a City of London dinner on Monday, Bailey said: “There is a range of operational issues arising from Brexit which, if not tackled, will create financial stability risks and issues for both the UK and the European Union.”
“I think this point is increasingly understood on both sides. It is not a matter of scaremongering to get negotiating advantage.”
The chief of the watchdog said that there was urgency for progress due to the current contracts, such as insurance, that will cease to have any significance once the UK leaves the EU.
“The best solutions are mutually agreed and enacted so that they are consistent. And to achieve this, we need by the end of March a joint commitment by the political authorities to a well-defined implementation or transition period which will create the space and support for the regulators to work with firms and political authorities to put practical solutions into place,” he said.
“It can be done, and I think there is a growing consensus on both sides that it must be done. I sense this view increasingly taking hold from my discussions around Europe.”
Along with many other UK ministers, Bailey said that another priority for the government was the financial sector.
Various banks have warned of plans to move jobs and operations from the UK in the lead up to Brexit due to concerns surrounding passporting rights.
A recent report for TheCityUK lobby group predicted the financial sector moving 35,000 UK jobs.