UK banks tell May: a Canada-style Brexit deal is not good enough

Banking trade body urges Theresa May and Philip Hammond to put City at centre of EU talks or risk dealing a major blow to the economy

Britain's banks have written to Theresa May and Philip Hammond warning that a Canada-style free trade agreement with the EU post-Brexit is not ambitious enough and that alignment with EU rules on finance is crucial.

The open letter from UK Finance, which represents major banks and other financial institutions, said the government must place the City at the centre of Brexit trade talks or risk dealing a major blow to the economy.

Banks, insurance companies and other financial firms in the EEA - the EU along with Iceland, Liechtenstein and Norway - are able to do business in the UK with separate regulatory approval. The system is known as passporting and allows firms to trade freely across borders. It applies the other way round, so that UK firms can operate in other EEA countries.

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Just left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I'll be spending a lot more time there. #Brexit