Philip Hammond accepts Brussels’ concerns about the supervision of financial markets in London which provide services across the continent.
But he warned that those concerns must not be used as a smokescreen to support EU financial centres, such as Frankfurt and Paris, at the expense of the UK.
In a speech in London, Mr Hammond assured City workers that his priority is to ensure that Britain remains "the financial services centre of the world" after Brexit.
GETTYPhilip Hammond is warning Brussels against trying to snatch business from the City of LondonRelated articles
He confirmed the new relationship sought with the EU on the supervision of financial markets will offer greater transparency and cooperation.
He said: "We acknowledge that there are legitimate concerns among our EU colleagues about the oversight and supervision of financial markets here in the UK that are providing vital financial services to EU firms and citizens.
"We will address them by making forward-leaning proposals for