The British Bankers’ Association has warned that the big banks in the UK are getting ready to leave the United Kingdom following fears and uncertainty about Brexit.
BBA head, Anthony Browne, in his writing in the The Observer says while the large banks gearing to relocate from the UK as early next year, smaller banks could transfer their operations abroad as early as 2017.
“Their hands are quivering over the relocate button,” he wrote. Most banks had backed the UK remaining in the EU.
Public and political debate at the moment is taking us in the wrong direction.” He stated.
These comments follow a similar warning he gave at the annual conference of the association last week.
On the impact of the Brexit on the UK financial system, Mr. Browne said, “Banking is probably more affected by Brexit than any other sector of the economy, both in the degree of impact and the scale of the implications.”
“It is the UK’s biggest export industry by far and is more internationally mobile than most.” He said.
He said the implication of Brexit for banks does not simply mean additional tariffs being imposed on trade but whether if banks would have legal rights to provide services.
He added that banks want to see the continuation of the EU’s “passporting” system which allows UK-based financial services to operate across Europe without separate authorization.
Banks in the UK have called for transition arrangements to be put in place after the UK leaves the EU.
But Mr Browne warned that in Europe and among UK eurosceptics the mood is getting stronger.
“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.”
He concluded by saying that the reality is that the UK should be prepared to see jobs moving to Paris or Frankfurt though it might be more expensive for banks and other financial firms in France and Germany to raise investment capital than if they were in the UK.
The UK Prime Minister, Theresa May, in her one of her earlier conversations about Brexit says her government will restrict free movement of people from the EU after the eventual pull-out from the bloc.
EU leaders however say the four freedoms – which include Freedom of Movement – are indivisible and non-negotiable.
If Mrs May insists on such restriction, it means the UK will have to exit the single market and lose passporting.
Source: News Express.
*Photo shows British Prime Minister Theresa May.