Britain’s finance ministry called on the European Union to open talks on financial services, after the London Stock Exchange on Tuesday urged the bloc to avoid protectionism.

Britain left the EU in December, largely cutting off the City of London’s financial services center from many of the markets it had formerly played a central role in.

Banks and other financial firms that used London as a gateway to Europe have set up units in the EU to avoid disruption for EU clients. Billions of euros in daily euro stock and derivatives trading have already left London for the EU.

Both sides have agreed to start a dialog via an informal forum for discussing financial rules, but it has yet to go live and Katharine Braddick, director of financial services at Britain’s finance ministry, said she hoped it was expedited.

“Once that memorandum of understanding is agreed we can get on with establishing our routine ways of engaging,” Braddick told TheCityUK’s annual conference.

The forum, which will not decide on financial market access, but it is viewed as critical to mend bridges, would put Britain’s EU relationship on a “reliable, transparent and understandable footing” to give business certainty, she added.

John Berrigan, head of the European Commission’s financial services unit, said the EU remains open to the rest of the world. “This is not about disengaging,” Berrigan added.

The Commission said work on approving the forum was ongoing.

A pressing issue for Britain is that EU permission for the London Stock Exchange to keep clearing euros derivatives for EU customers expires in June 2022, potentially fragmenting a major market involving trillions of euros.

The Commission is asking banks and asset managers how quickly they can shift this clearing from London to Deutsche Boerse in Frankfurt and if legislation is needed.

The EU wants to directly supervise euro clearing and bolster its “open strategic autonomy” to avoid reliance on the City.

“I think it’s critically important for the EU to remain open and to resist the protectionist temptation,” London Stock Exchange Chief Executive David Schwimmer told a separate European Financial Services conference.

“What has made the EU so successful is its openness to the world and being able to embed itself in global ecosystems.”

EU firms should be able to access the same liquidity, services, data and technology capabilities as their peers in respect to clearing, Schwimmer said.

“I am not arguing for an absence of control by the EU over important strategic areas,” he said.

Washington Wary

With Britain no longer tied to EU rules, it is reforming how it regulates the City to buttress its global competitiveness.

Braddick said this would mean tailoring rules within a framework of global standards, and not ripping up the rulebook.

“Any idea there is some vast philosophical gap about risk appetite or financial regulation is really misplaced,” she said.

Britain’s finance ministry will make detailed proposals for wholesale financial market reform in the final quarter of 2021.

“We have not seen a flood of either talent or capital out of the UK into the European Union,” Braddick said.

U.S. officials sounded a note of caution against the EU fragmenting financial markets after Brexit.

“The future of our financial services relationship really needs to be based on principles of openness, financial market integration and of course competition,” Sharon Yang, deputy assistant secretary at the U.S. Treasury, said.

(Reporting by Huw Jones; editing by Jane Merriman and Alexander Smith)