Britain expects to seal a financial services cooperation pact with the European Union shortly, a senior finance ministry official told a conference on challenges from market fragmentation.

The City of London’s ties with the bloc were severed after Britain left the EU’s single market on Dec. 31 and the prospect of a pact has raised hopes in some quarters of at least a partial resumption of direct access to the continent’s financial markets.

Katharine Braddick, the finance ministry’s head of financial services, said both sides were committed to agreeing an MoU on regulatory cooperation by the end of March.

“I don’t see any reason why we are not going to be able to deliver on that commitment,” Braddick said, echoing comments this week from the EU.

Braddick said talk about the pact has been “exuberant” and in practice it would only be an “administrative vehicle” for dialogue.

She was speaking at the launch of a report on financial market fragmentation from the International Regulatory Strategy Group, a think tank backed by the City of London and TheCityUK.

It calls on the G7, G20 and the COP26 climate change summit in November to renew commitments to integrated financial markets made during the financial crisis in 2009, to avoid spiralling compliance costs as economies recover from COVID-19 and tackle climate change.

Antony Manchester, managing director at BlackRock, said it was a “delicate time” for finance as international trade is being questioned and Brexit fragments markets in Europe.

“A call for coherent regulation is not the same as a call for less or no regulation,” Manchester said.

Global investors also face the prospect of different systems in China, the EU, United States and Britain for disclosing and labelling environment-friendly investments for tackling climate change, said Tamara Cizeika, a lawyer at Allen & Overy.

Countries are further fragmenting markets by restricting the flow of cross-border data between financial firms, added Toshiyuki Miyoshi, deputy commissioner for international affairs at Japan’s FSA regulator.