The finance minister of Luxembourg has called on the EU to “be creative” by offering a unique deal that will protect financial services in Britain and on the Continent.

Speaking to The Sunday Times, Pierre Gramegna said “we should look at thinking in new categories and be creative…in the new relationship”.

“Maybe we are stuck too much in precedent. Some of the financial centres outside the EU are very actively courting institutions and devising schemes to attract firms. A number of firms I speak to have an option B ready that involves repatriating EU activities to their headquarters.

Prime Minister Theresa May has been pushing for a “mutual recognition” deal for financial services.

However, Gramegna argued that “equivalence” could be used as a basic model on which to build.

“Equivalence was designed as an ad hoc fix for certain specific activities,” he said.

“Does that disqualify it completely? Is there no merit in looking at how we could make it workable through an innovative approach in financial services, where governance and scope need to be spelled out? Maybe we should get the experts together and see if solutions could be reached.”

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