Sterling edges up but traders cautious on Brexit talks

Theresa May urged to cling onto power until 2021 to save Brexit stop Tory collapse

According to the report, the decision to allow banks to continue to operate in Britain as normal has been taken to preserve jobs in the financial centre and to protect the taxes European banks pay in Britain.

The decision, due to be made public at 1pm today, would mean European banks offering wholesale services would not face new hurdles to operating in London, which vies with NY for the title of the world's financial capital.

According to the BBC, EU lenders operating in Britain will not have to create subsidiaries based in the United Kingdom to carry on with their business even if London and Brussels fail to reach a trade agreement.

That is on top of 110 foreign insurance branches, with 80 from the EEA.

A statue is silhouetted against the Bank of England in the City of London, Britain, December 12, 2017.

Deutsche Bank has 9,000 staff in London.

The BoE's proposal indicated a softer British position than that of the European Union which on Wednesday stiffened its rules for non-EU investment banks which operate inside the bloc.

Europe-based banks operate in Britain through a network of branches, which offer an easy way to move money around a lender's worldwide business, although they can also leave British customers exposed.

But her comments come after EU chief negotiator Michel Barnier indicated he was working towards reaching a political agreement on the future UK/EU relationship by October 2018, in time for it to be published alongside a new treaty covering withdrawal and transition arrangements.

Chancellor Philip Hammond said: "I am confident that we will agree a deep and special partnership for the future with the EU27 and that we will soon finalise the terms of an implementation period that will ā€ˇprovide continuity as we move to that new partnership".

London vies with NY as the world's financial capital.

Mr Barnier said "time is going to be of the essence" if both sides were to agree on the transition and the shape of the future relationship between Britain and the European Union before Brexit takes full effect.

The BoE's conditions on whether branches should become subsidiaries will be seen as a riposte the euro clearing plans in Brussels, which also emphasizes the need for strong supervisory cooperation to avoid forced relocation.

Europe has set a target date for when Brexit will really hit.

More importantly, however, allowing EU banks to keep their branches open will boost UK exports, as the services sold by the UK branch of a European bank to a third party count as UK exports.

The BoE will also get powers to "recognize" and supervise clearing houses from the European Union after Brexit.

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