AMSTERDAM replaced London as the largest financial trading centre in Europe last month as Brexit-related changes came into force.

An average of 9.2 billion euros (£8.1 billion) worth of shares were traded on Euronext Amsterdam, alongside Dutch divisions of CBOE Europe and the Turquoise exchange in January, according to data from CBOE Europe first reported by the Financial Times.

Following the end of the transition period, US banks wanting to buy European stocks would no longer be able to trade via London.

The Turquoise trading platform, owned by the London Stock Exchange Group, had already moved to the Netherlands, and follows around 7000 jobs that had shifted in the financial sector from the UK to the EU following the 2016 referendum.

The National:

Reasons for the shift include the EU saying it does not recognise UK exchanges as having the same levels of supervisory status as its counterparts in the Netherlands, France and Germany.

Without an “equivalence” deal being struck, around 6.5 billion euros (£5.7bn) of deals shifted overnight to the EU, including the fees that come with them.

Tensions are high between London and Brussels as banking regulators continue to thrash out a memorandum of understanding over future rules.

The SNP said Boris Johnson is "harming the whole economy" with his hard Brexit.

The party's shadow business secretary Stephen Flynn said: "The blow to financial services is a direct result of the Tory decision to impose the hardest of Brexits on the UK - ripping us out of the world's largest single market and failing to agree a financial services deal before the end of the transition period.

The National:

"The only way to protect Scotland's interests, secure our place in Europe, and regain the full trading benefits of EU membership is to become an independent country. People in Scotland have the right to decide their own future, in a post-pandemic referendum.

"In the meantime, the Tory Government must mitigate the damage of Brexit by agreeing a comprehensive financial services deal with the EU, supporting businesses, and delivering a multi-billion pound package of Brexit compensation for Scotland."

The Prime Minister’s official spokesman told a Westminster briefing: “The UK exchanges remain some of the biggest and deepest in the world and we continue, as we have done, to believe in open, global markets and firms’ ability to choose where to trade.

“Despite the fact that we have supplied all of the necessary paperwork and are one of the world’s most pre-eminent financial centres with a strong regulatory system, the EU still haven’t granted us full equivalence.

“This has meant that a number of EU shares that were previously traded on UK venues have moved to the EU venues on advice of the European regulator.

“But our position is fragmentation of share trading across financial centres is in no-one’s interests, so we remain open to discussions with the EU about this.”

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Last night, Bank of England governor Andrew Bailey warned that the UK would not be forced to follow EU rules to the letter and that sensible agreements over what constitutes “equivalence” were needed.

Giving the governor’s annual Mansion House speech to the City, he said: “The EU has argued it must better understand how the UK intends to amend or alter the rules going forwards.

“This is a standard that the EU holds no other country to and would, I suspect, not agree to be held to itself. It is hard to see beyond one of two ways of interpreting this statement, neither of which stands up to much scrutiny.”

He added: “I’m afraid a world in which the EU dictates and determines which rules and standards we have in the UK isn’t going to work.”

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Bailey also said that the UK should avoid becoming a low-tax, low-regulation country and that it would be a mistake for the EU to cut off London from its financial systems.

The governor said: “I can’t predict what will actually happen exactly because it’s not within our control, but I think we have to state the argument for why it’s important to have global standards, global markets and safe openness. And if we all sign up to that, there isn’t a need to go in that direction.”

A memorandum of understanding is expected to be signed between the UK and EU over financial services in March.