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Brexit uncertainty could cost tens of thousands of jobs, City bosses warn

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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”.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. So, Mr Flint has said no holistic detailed analysis has taken place but the headline says HSBC will move 10,000 jobs. How is this article even credible? Especially in light of recent acknowledgements of fact less and dubious information being promoted with confidence for scaremongering pre-Brexit. How does this article really differ?

  2. Ah! the Brexit optimists. Yes, it may not happen, but isn’t always wise to plan for the worst? I guess it’s just managing client expectations. If it does happen there won’t be enough egg around to put on faces. The risk should be recognised.

    As far as HSBC is concerned it is as well to remember that they have only had their HQ in UK for about 25 years and in 2015 and 2016 were debating whether they should move back to Hong Kong or relocate to the US. So they don’t consider themselves rooted in the UK and take a very flexible outlook. Then what of the other banks? Will the likes of JP Morgan, Citi Group and Barclays (for example) reduce their UK headcount and relocate large slices of their operations if conditions post Brexit don’t suit them?

    I would say that HMG needs to be very, very careful and that is why Theresa Farage is wetting herself, not really knowing how to deal with all this. She really doesn’t want to be remembered as someone who trashed the economy.

  3. Lies, damn lies and statistics – that’s all we hear from vested interest/lobbying groups and these three individuals are no different as the City was clearly against leaving the EU and is agitating for a ‘flaccid’ Brexit! Experience has certainly shown me that it is sensible to have a healthy cynicism about everything we hear and read, regardless of whether it supports or contradicts our own values and beliefs, so why not in this instance Harry? Now they might be right in what they are saying this time but you only seem to think the Remainers espouse the truth and the Brexiteers are incapable of presenting any position of merit. Statistically (!) how can that be true? Surely it’s better to have a strategy that can adapt to all scenarios, not just the worst as, in all sorts of areas in life, we see self-fulfilling prophecies come to pass. If we, as a country, continue to talk ourselves down then we should only expect a rubbish result. It wont be 100% good for us or 100% bad but, whatever the final outcome is, it will be as good as we decide to make it so wipe up that milk, dry your tears and put on your happy face! P.S. the unnecessarily personal remarks regarding those who don’t support your views weakens your arguments.

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