Some of the largest international banks based in Britain are planning to leave London due to the Brexit vote, according to a warning from the British Bankers’ Association (BBA).
In the run-up to the referendum many banks came out for Remain, and fears that some banks will leave Britain have only increased since the majority of Britons voted to leave the EU in June.
Within weeks of the referendum result, the Hong Kong and Shanghai Banking Corporation (HSBC) felt obliged to issue a statement that it had no plans to move its headquarters out of the East London financial district of Canary Wharf.
However, in a feature for The Observer, the boss of the BBA, Anthony Browne, maintains that re-locating from London is on the agenda for both high street banks and their merchant banking counterparts. Browne says that, “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.”
According to Mr Browne, there are a number of reasons that banks are looking to move, with the loss of ‘passporting’ within the European Single Market being one of the main causes for concern.
“Businesses can’t wait until the last minute. Most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers, the date by which this must happen and how best to do it,” he added.
Once the UK has left the European Union, passporting via London is expected to cease. This means that banks and insurance companies will no longer be able to sell their services in the European Single Market without having to establish their headquarters in that country.
A government spokesperson sought to quell fears raised by My Browne, stating: “We are determined to maintain the City’s leading position as one of the key centres of global finance as we make a success out of Brexit.”
If the banks do relocate, it is once again likely to undermine London’s status as the financial capital of the world, on a far greater scale than when HSBC first looked to be heading towards a move away.
Canary Wharf is currently home to Barclays, Credit Suisse, HSBC, J.P. Morgan and Morgan Stanley, as well as a host of other banking organisations.
Photo by David Jones, available for use under the creative commons license