Main Menu

Worries increase over EU talks

BBA boss Browne adds to bank exit warning

Money - own pic

Britain’s biggest banks are preparing to leave the UK early next year because of the Brexit uncertainty, according to the head of the British Bankers Association (BBA)

Anthony Browne, writing in a Sunday newspaper, echoed comments made by Royal Bank of Scotland chairman Sir Howard Davies last week.

“Their hands are quivering over the relocate button,” he writes. “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.”

He adds that “public and political debate at the moment is taking us in the wrong direction.”

Mr Browne stressed that banking is “probably more affected by Brexit than any other sector of the economy”.

Banks supported Britain’s continued membership of the European Union and fear the loss of the “passporting” system which allows them to operate across Europe.

“It is the UK’s biggest export industry by far and is more internationally mobile than most. But it also gets its rules and legal rights to serve its customers cross-border from the EU,” says Mr Browne who warns that the mood in Europe is “hardening”.

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.”

UK Brexit secretary David Davis and the chancellor Philip Hammond last week sought to offer reassurance that they were seeking ways of protecting the City of London, largely by allowing it continued access to the single market.

The move may help reassure bankers, but it prompted an angry response from Scotland that the UK government was favouring certain sectors of the economy.

Westminster’s determination to take control of the freedom of movement is the single biggest stumbling block to agreeing a deal.

Goldman Sachs is said to be drawing up plans to switch 2,000 of its employees to a European city should the UK lose its passporting rights.

The industry body, TheCityUK, has claimed that up to 70,000 financial jobs could be lost if Britain leaves the EU without a new agreement for the City of London.

Stephen Gethins MP, the SNP’s Europe spokesperson, described Mr Browne’s comment
s as “further evidence of the deeply damaging effect of the UK leaving the EU on our economy”. 

He said: “We’ve already heard that leaving the EU could cost Scotland up to 80,000 jobs and the Scottish Government is determined to protect Scotland’s place in the EU single market which is essential for our jobs and economic growth.”

Sir Howard Davies speaking last week at a property conference made similar comments about a banking exit.

However, addressing the same event financier Guy Hands dismissed the warnings.

“I think one of the big mistakes the Europeans are making is the belief that they can somehow take the financial services business out of London and they can plonk it in Frankfurt, or plonk it in Paris, or plonk it in Amsterdam,” he said.

“It’s not going to happen.”



Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.