Some of the UK’s largest bank’s are looking to get out of the UK in the first few months of 2017 due to mounting fears about the impact of impending Brexit negotiations, the head of the British Bankers’ Association Anthony Browne has warned.
Writing in the Observer the BBA’s chief executive said the “public and political debate at the moment is taking us in the wrong direction” and warned that the “£20bn trade in financial services is at risk”.
Whilst he said the government, and in particular the chancellor, Philip Hammond, and the Brexit secretary, David Davis, were making the right noises he said there was a chance that the UK could talk itself into defeat before negotiations with Europe have even started.
He said the biggest risk came from changes to passporting rights and said that a bothched negotiation could have a severe impact on the UK.
He said: “There is a consensus that the EU’s integrated financial market is one of its great success stories. It makes it easier and cheaper for French farmers, German manufacturers and Italian fashion designers to secure funding.
“It helps EU citizens get better returns for their savings. And it also creates jobs, not least in the UK, where financial services as a whole employs more than a million people, two-thirds of them outside London.
“But it is now at risk. It is underpinned legally by the “passporting” system enshrined in EU legislation, which allows banks based in the UK to sell services to customers in Europe, and banks based in Europe to sell services to customers in the UK, and access the global financial centre that is London.
“It also allows banks based in one EU country to set up branches in any other EU country without going through local regulators.”
But with that now at risk he has warned that wbanks are now considering relocation.
“Their [banks] hands are quivering over the relocate button. Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year,” he said.
However he said the Capital will still continue as a global financial powerhouse despite this adding: “London will survive as a global financial centre. Finance is inventive and will find a way through.
“But putting up barriers to the trade in financial services across the Channel will make us all worse off, not just in the UK but in mainland Europe.”