BERLIN (Reuters) - The European Union must make its own decisions and cannot have outside legislators deciding on financial services rules after Brexit, German Finance Minister Olaf Scholz said on Thursday.

Asked about the so-called equivalence system, which is based on Brussels granting access to the EU for banks, insurers and asset managers from outside the bloc if the bloc deems their home rules to be similar enough, Scholz said:

“I regret that developments are now such that it is going to be very difficult for the financial system in Britain.”

“But it is clear that the European Union must, of course, take its own decisions, including on its own within the framework of the democratic structures we have established. There cannot be additional legislators on the outside.”

Britain has said equivalence is too one-sided and wants a bespoke trading deal for banks based on mutual recognition or the UK and EU accepting each other’s rules.