Catherine McGuinness, the City of London's political leader, says the UK financial sector does not want "a bonfire of regulation". (Photo: Agencies)

As the realities of Brexit begin to reshape the UK finance sector, London does not want a "bonfire of regulations" to keep its place as a top international finance center, according to the City of London's political leader - but it is ready to act if the European Union blocks access.

The UK capital is the leading force in the world's $6.6 trillion-a-day foreign exchange market.

But cut off from the EU, its biggest single customer, Brexit has already prompted a raft of business and job losses in the City. "It's disappointing to lose business," said Catherine McGuinness, who leads the City of London Corporation. "But it's not at all catastrophic."

London's finance sector has so far lost around 7,500 jobs because of Brexit, according to the financier – far lower than the potential 65,000 to 75,000 job losses predicted around the time of the referendum.

Some euro shares and derivatives trading has also moved abroad but, according to a September survey by Global Financial Centres Index, London had actually strengthened its position as the world's second leading international financial hub.

In fact, many City bankers see an opportunity now the UK has more space to write its own financial rules.

"We're not looking for a bonfire of regulation, we're not looking for a move away from international standards – absolutely not," said McGuinness. "We're not expecting any major deregulation at all."

But she stressed that with a financial capital the size of London, "it's clear that we can't be rule takers – we must be rule makers."

The City of London has so far lost around 7,500 jobs because of Brexit. (Photo: CFP)

She added: "We need to look at what our strengths are and what we need to do to build on them effectively – and hopefully that's against the framework of international regulations that we will help to shape."

One of the financial conundrums of a post-Brexit landscape is whether it is worth the UK seeking so-called equivalence – staying aligned with the majority of the EU's financial rules in return for market access.

"I would hope that equivalence decisions could be made because they ought to be pragmatic and we are completely aligned in terms of rules," said McGuinness.

Before deciding on any UK access, the EU has said it wants to look at the country's planned divergence from its rules, but McGuinness said it would be irrational of the EU not to accept.

Strangely, such considerations were given scant attention during Brexit negotiations, she said, despite the finance sector paying more than 10 percent of Britain's tax bill: "I've speculated it's because fish is more picturesque than finance."

McGuinness added: "It may be that we don't tell our own story well enough or perhaps they felt the sector was big enough to make its own way." Nevertheless, she said it was both "surprising" and "disappointing".

Now, as Britain charts its new course in international waters, McGuinness hopes to see more government support for areas such as green finance and fintech.

"I think we'll stay the FX [foreign exchange] capital of the world – that would be my prediction," McGuinness said of the City's long-term future. "We are very confident in London's basic strengths and that we will make up business elsewhere."