US banks are drawing up plans to move some of their London-based activities to Ireland over concerns the UK is drifting apart from the EU.
The Financial Times reports that according to people familiar with Bank of America, Citigroup and Morgan Stanley, Ireland is considered a favourable location should they need to move some of their European business out of the UK.
One senior UK-based manager at a Wall Street bank says: “I’m frankly looking at moving some activities to Ireland. I think the Irish central bank and government would welcome this.”
The sources said plans were in most cases still at very early stages. But they said US banks have started preparing for the eurozone’s impending banking union that threatens to isolate Britain and for a possible UK exit from the EU.
As the European Central Bank prepares to take charge of the biggest banks in the eurozone later this year, there are fears among some executives at US banks that this will drive a wedge between the UK and the rest of Europe’s financial system.
Most US and Asian banks have chosen to base their main European operations in the UK, giving them an automatic passport to carry out their services across all 28 countries in the EU.
But US executives say the UK is unlikely to be granted the same “passporting” rights if it leaves the EU.
Prime Minister David Cameron has promised to hold a referendum on a renegotiated EU membership if the Conservatives win next May’s election.
Ireland’s attractions for US banks include its low corporate tax rate, English speaking population, English-style legal system and eurozone membership.
One banker says: “Dublin is selling itself very hard at the moment.”