Major banks are making plans to relocate out of the UK early next year amid concerns about the impact of a “hard Brexit” on passporting rights.
Writing in The Observer yesterday, British Bankers’ Association chief executive Anthony Browne warned the tone of the debate around Brexit negotiations risks damaging the UK economy before the talks have started.
He says: “The problem comes – as seems increasingly likely, judging by the rhetoric – when national governments try to use the EU exit negotiations to build walls across the Channel to split Europe’s integrated financial market in two, in order to force jobs from London.
“From a European perspective, this would be cutting off its nose to spite its face. It might lead to a few jobs moving to Paris or Frankfurt but it will make it more expensive for companies in France and Germany to raise money for investment, slowing the wider economy.”
Browne argues financial services firms cannot wait for negotiations which may see passporting rights disappear alongside banks’ legal right to provide services.
He adds: “It takes years to move operations. Banks might hope for the best but have to plan for the worst.
“Most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers, the date by which this must happen and how best to do it. Their 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.”