There are several important elements to disentangle here. And imo, biggest long-term problem for City is not EU's onshoring of EU trade but UK's loss of influence over EU banking regulation. Short thread https://twitter.com/Peston/status/1359653603972104194

1. Onshoring not surprising: as soon as it was clear UK banks wouldn't retain passporting, banks started to plan. They started to move some activity/personnel to EU. EU not granting UK equivalence decision also not helping.

2) Power of regulation: story here isn't really abt economic damage to City/UK in short-term (that's still tbd) or damage to City "brand". What *is* noteworthy is that EU regulation can and does impact the way banks (even those not in EU) operate. This has long-term implications.

3) Influence matters: Out of EU, Treasury has no say over EU banking regulation. That matters if, for eg, EU regs make it harder for City to trade certain things. UK needs a dialogue of FS with EU (EU has 1 with Canada and Japan, but not UK). Can't rely on BoE influence only..

4) Influence is (still) key: UK must also remain (much more) active in global financial bodies - many of which influence EU banking rules. FSB, Basel Committee on Banking Supervision, @IOSCOPress, etc. Our @instituteforgov paper on influencing the EU after Brexit looked at this.

5) Full link to paper is here: https://www.instituteforgovernment.org.uk/publications/influencing-eu-after-brexit