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Banks prepare to pull out of the UK on Brexit fears

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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.”

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. It seems that it won’t be too much longer before we Remoaners may be proved to be realists. Personally I will take absolutely no satisfaction if I will have been proved to have been right.

  2. Banks are so interconnected with numerous economic states for the multitude of (often cross border) services they offer that it seems moving to the other side of the fence is entirely sensible. They would only need to negotiate with a crippled UK market rather than the rest of the world – when it comes to business its very rare to admirably go down with the ship.

  3. Oh no what will we do without all those bankers!!

    • Financial services is the single biggest contributor to tax revenues in the UK. And that’s ignoring the indirect taxes paid by those working in financial services such as VAT, Stamp Duty etc and the income taxes on those that they may employ.

      No bankers = no banks = no UK financial services industry = City of London becomes ghost-town = London employment market (direct & indirect) shrinks dramatically = South East England becomes a ghost-town = national tax receipts decimated = no subsidy for those t’up North.

      Do the math!

  4. @Nick

    Seeing as they pay proportionately the most tax in the UK and contribute very significantly to our GDP, you may well not wish to find out what you will do without them

    • Harry,

      Dose the tax take offset the bail out of the bank creditors we taxpayers ponied up for in 08/09 and continue to pay for now through suppressed interest rates ginning up asset price? In addition to the open cheque we tax payers continue we continue to be on the on the hook for while we have the intermingling of Grannies savings with systemically significant banks (perm any one from many) prop desk forex bets etc.

      Please bring me proper capitalism ‘cause what we have now bears no resemblance to it.

  5. Remove word ‘relocate’ insert phrase ‘ open up offshore arms’.
    Of course they have to plan for the loss of passporting rights, but this story is overblown!! Most banks and financial institutions already have offshore operations to enable passporting to carry on and also have UK operations in place to carry on operations here.
    Please cut the nonsense and start focusing on actual journalism!

    • They only have passporting rights originating from their country of incorporation. Currently its the UK so they access via the EU. Post Brexit they will need to stay within the EU to keep their current position negotiating a new deal with the UK or set up agreements with every country they deal with on uncertain terms. Offshore offices do not have separate passporting rights, they use the headquartered agreement.

  6. If they go they go it will not influence the brexit decision. Canary wharf as a HMO on a grand scale could prove to be quite a buzzing community where honesty and integrity are able to be spelt.

  7. Fully agree with Harry, including comment. Bankers have always been the real power controlling policy’s. Brexiteers started crowing too early! No one can predict the final outcome, but still a long uncertain road. Let’s just hope the grown ups are making fully considered decisions!!

  8. @ Stuart Rathbone

    Whatever the figures or the rights and wrongs of 2008/9, the fact remains that today, here and now, the banking industry is a very significant contributor. It they are lost or diminished there isn’t anything remotely viable that will replace their input to the national coffers. In which case we will be worse off. QED.

  9. And please remember that London’s GDP per person is 186% of the European average. And what do you imagine is the contributory factor to this figure?

    If you take out London the UK would be about as rich as Spain with GDP per head 57% of EU average. Financial services directly employs about 1.1 million and contributes 11% of all government tax receipts. The total number employed in the UK is 32 million. Therefore about 3.4% contributes 11%.

    So you want to do without this sector? If we are not passported put your head between your legs and……………

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