The head of the Financial Conduct Authority has urged the UK and the EU to outline a transition agreement as soon as possible.
Speaking to a Lords sub-committee today, Andrew Bailey said he was not hopeful the government would achieve a signed agreement, but some form of commitment would be important.
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"I would not expect that we will get a signed agreement on transition, but I do think that we need something that is legally binding in the sense that it can be applied, and to do that I think it needs to be something like a unconditional commitment on both sides," he said.
Bailey also raised concerns about the legal status of financial contracts such as insurance policies, saying this was a "symmetric" risk affecting both the UK and the EU.
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The EU has said it will not start talking about trade or transitional arrangements until the UK has settled its so-called "Brexit bill".
However, reports are now suggesting that Theresa May has agreed a framework for the financial settlement, with a view to starting the next phase of negotiations after the European Council meeting at the beginning of next month.
