Most of the leading banks based in the UK could begin to pull-out of the country early next year because of uncertainty about Britain's exit from the EU and increasing fears over the impending Brexit negotiations, a top banking association has warned.
London: Most of the leading banks based in the UK could begin to pull-out of the country early next year because of uncertainty about Britain's exit from the EU and increasing fears over the impending Brexit negotiations, a top banking association has warned.
British Bankers' Association chief Anthony Browne's dramatic claim was made in an article published today in the 'Observer' newspaper. Browne said smaller banks could also move operations overseas by next year.
"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 wrote.
He added: "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. But it also gets its rules and legal rights to serve its customers cross-border from the EU.
"For banks, Brexit does not simply mean additional tariffs being imposed on trade - as is likely to be the case with other sectors. It is about whether banks have the legal right to provide services."
Banks, which had overwhelming campaigned for Britain to remain in the European Union (EU) in the June 23 referendum, want to see the continuation of the EU's "passporting" system, allowing UK-based financial services to operate across Europe without needing separate authorisation.
They have called for transition arrangements to be put in place after the UK leaves the EU, following a vote in favour of Brexit.
"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 says.
"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," he adds.