The UK financial services industry could risk an exodus of tens of thousands of jobs without certainty over Britain’s Brexit deal, City bosses have warned.
Speaking at a Treasury Select Committee hearing today, London Stock Exchange chief executive Xavier Rolet said its clients would move operations if the LSE did not have a clear path for managing its global operation.
When asked how many jobs in London have come from other banks to have access to the EU, and, as a consequence, being at risk of moving out of the UK, HSBC chairman Douglas Flint says the figure would be in the tens of thousands.
Flint says:”[These foreign banks] will need to have operations to other European countries. A great number of operations came to the UK to access the European market and also to benefit by the regulatory and political system of the UK…Passporting is one reason to be in London and that made this global hub even bigger.”
In the days following the EU referendum, HSBC reportedly said it could move 1,000 staff from its London office to Paris.
Morgan Stanley, BNP Paribas and JPMorgan have also reportedly made plans to reduce their UK operations following the vote to leave the EU.
Meanwhile, Rolet called for a 5-year standstill on existing regulations from when Article 50 is triggered, which would be thee years after the UK would leave the EU.
Flint said there should be around two to three years of “grandfathering” where existing regulations stay in force after Article 50 is triggered.
When asked by MPs, Flint says no quantitative analysis has been done by HSBC into the consequences of the exit from the single market.
Allianz Global Investors Elisabeth Corley said: “Part of the uncertainty is how much we have to move. Clearly you need to move relationship managers and front office. The question is the middle and back office…That is a political negotiation as much as a technical negotiation.”
She added the political process of adoption is “a piece of string” and that it’s “very hard to judge”.