The British Bankers Association said Friday that while the European Union summit had reached an agreement that would put the euro zone on a more stable footing, it was vital for Britain to secure sensible financial regulations.

Europe divided Friday in a historic rift over building a closer fiscal union to preserve the euro, with a large majority of countries led by Germany and France agreeing to forge ahead with a separate treaty, leaving Britain isolated.

Twenty-three of the 27 leaders agreed to pursue tighter integration with stricter budget rules for the single currency area, but Britain said it could not accept proposed amendments to the EU treaty after failing to secure concessions for itself.

We do not yet know the impact this new arrangement is going to have on the UK's ability to secure agreements on sensible regulation, but that is critical, said British Bankers Association Chief Executive Angela Knight.

The UK has most of the EU's financial business, but we have a minority of the votes. The City does business globally but pays its taxes here, so retaining a strong, vibrant, international finance hub here is good for jobs and our economy, she added.

(Reporting by Sudip Kar-Gupta; Editing by David Jones)