Brexit warning to MPs

RBS chairman predicts banker exit over EU uncertainty

Sir Howard DaviesRBS chairman Sir Howard Davies has claimed that banks are planning to shift much of their activity from London to the eurozone because of Brexit.

Sir Howard said senior bankers had spoken of “current plans” to move operations out of the City of London over fears they will lose free access to the single market.

In a stark warning to those politicians favouring a “hard Brexit” option, Sir Howard told a property conference: “The London property market may well not be so buoyant if we do have some downsizing of the City, which I expect to happen.

“And there are current plans by a lot of banks to move the balance of their activity that they undertake here into other eurozone centres, initially as a hedging strategy just in case they find barriers put up against them here.”

Finance workers account for a large part of the property market  in central London which has already been hit by tax hikes, such as higher stamp duty on expensive homes.

International Business Times, which reported Sir Howard’s comments, noted that senior players in the property market are now concerned that uncertainty around Brexit will add to their costs and curb their ability to trade.

“We are in a position where the froth has gone off the London property market,” Davies said.

At the same event, the financier Guy Hands countered Sir Howard by saying London would not lose its crown as the financial services capital. He urged people to take a long-term view when investing in property.

He said: “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.

“It’s not going to happen. If the financial service business moves out of London, it will move out of Europe, and it will affect Europe very negatively indeed.

“With the technology that exists today, with 24-hour trading, with the ability to use video conferencing, etc, there isn’t a need to be based in one place, except for when that one place gives you culture. And there is no way that Paris, Amsterdam, or Frankfurt are going to replace London as a centre of financial excellence in my lifetime or my children’s lifetime.

“So if Europe thinks that by somehow harming the city of London it’s going to get business, they’re wrong. Completely wrong. All it will harm is Europe, and it will harm Europe immeasurably.”


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