LONDON, Oct. 23 (UPI) — Large banks are poised to hit the relocate button due to the impact Brexit will have on them, a banking expert said.
“Their hands are quivering over the relocate button,” said Anthony Browne, president of the British Bankers’ Association. Most banks favored the United Kingdom staying in the European Union and it is going to be the hardest-hit by the U.K.’s vote to exit, BBC reported.
Browne wrote a piece in The Guardian warning that small banks, too, could move operations overseas by 2017.
His remarks build on comments he made last week at the BBA annual conference when he said banks have “set up project teams to work out operations they need to move by when” and how to accomplish that.
“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,” Browne said.
“It is the U.K.’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.”
Browne said banks are hardening their position and are calling for Britain to make “transition arrangements” once the U.K. exits the European Union.
“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,” Browne said.
“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.”
Liberal Democrat foreign affairs spokesman Tom Brake said if the U.K. conducts a “hard Brexit” that would “threaten the £65bn (about $80 billion) that the U.K. financial services industry pays in taxes each year”.
“The Conservative government must explain how it will make up this funding shortfall if the U.K. leaves the single market.”