The city of London and its sister district in east London’s Canary Wharf are home to the world’s highest number of banks , and the largest commercial insurance market. They are not scrambling to prepare for Brexit—the biggest challenge the UK financial sector will face since the 2007-2009 financial crisis.

McFarlane also brushed off fears expressed by some bankers and politicians that a blueprint for Britain’s future trading relationship with the EU, proposed by Prime Minister Theresa May, would cripple job creation and trigger London’s decline as a global financial services centre.

Mc Farlane stated: “I don’t think in the long run that there will be terminal damage [to London],”in an interview in his capacity as chair of lobby group TheCityUK.

In the short term, Brexit is set to cost Britain up to 12,000 financial services jobs, according to the city of London’s financial district leader Catherine McGuiness. Many more jobs are also expected to dissapear in the long term.

However, McFarlane remained firm that London would remain Europe’s primary hub for financial services, due to the city having the continent’s deepest markets and broadest pool of talent– countering  doomsayers who claim that the sector could end up the biggest loser from the end of unfettered access to EU markets.

The financial sector accounts for 12 % of Britain’s economic output, but McFarlane assured that the government’s dismissal of the sector’s preferred plans for access to the EU single market post-Brexit will not be as destructive as some commentators have predicted.

Brexit supporters have remained strong on their stance that  there may be some short-term pain for Britain’s $2.9 trn economy– but that long term it will prosper when cut free from the EU.

However, according to McFarlane –A sharp spike in Italy’s cost of borrowing in late May acts as a sobering reminder to EU stakeholders that it needs London’s markets as much as London needs the EU.

Many had pinned hopes on a bid for “mutual recognition” – whereby Britain and the EU would accept each other’s rules in exchange for broad two-way market access – as the best way to protect financial contracts and activity worth trns of euros once Britain exits the EU on March 29.

Prime Minister May has instead chosen to build trading ties on a legal mechanism called “equivalence”, whereby the EU deems a country’s rules to be as robust as its own.

McFarlane said that the government now needed to act fast to negotiate “expanded equivalence” for Britain after critics said the regime exposed firms to sudden loss of EU market access.

“You need to get on with it. Aggressively. Because radical change in this space is difficult,” he stated.

The EU has so far opposed any attempts to modify equivalence so far and has stated that it has no further plans to either.