21st November 2017.
Brexit Deal Will Be “Too Little Too Late” say UK Banks
UK politicians are still fighting to get a deal with the European Union for early next year that will ease businesses’ panic about Brexit. However for the financial sector, it might be too late.
Global banks are preparing their relocation plans for early next year to guarantee their offices are running by the time the UK exits, a spokesman has claimed.
Societe Generale deputy chief executive officer Severin Cabannes urges Theresa May and her government to make a deal soon to prevent businesses from jumping ship.
“If there is no precise direction at the beginning of next year, I would say that the banking industry players would have to take decisions, early decisions in the worst-case scenario”, Cabannes added.
With Brexit talks stalled for months, firms including Goldman Sachs, Morgan Stanley, UBS and Royal Bank of Scotland will soon start moving people, infrastructure and capital into their new trading hubs inside the EU.
According to sources at The Independent, banks are eager to avoid implementing their contingency arrangements, which are likely to cost more than $500m per firm. However they are feeling the pressure as more time goes on and no deal is made, and they need at least 12 months to set-up operations inside the EU.
While Brexit secretary David Davis says he is determined to maintain the competitiveness of the City and to negotiate a two-year transition deal, many banks fear it is too little, too late. This is being further aggravated by EU regulators, who are calling the first quarter of 2018 “the point of no return” for banks
The UK could lose as many as 75,000 jobs in banking and insurance if it leaves the EU without a trade deal, said Sam Woods, Britain’s top banking regulator. About 10,000 UK-based jobs are probably at risk on “day one” of Brexit, Mr Woods, head of the Bank of England’s Prudential Regulation Authority, told lawmakers earlier this month.
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