Banks ready to ‘ad­just’ over Brexit

The Myanmar Times - - International Business -

BRI­TAIN-BASED banks can “ad­just” their op­er­a­tions over the next year, Bank of Eng­land chief Mark Car­ney said when asked about the prospect of lenders re­lo­cat­ing abroad be­cause of Brexit.

Re­act­ing to com­ments from Bri­tain’s pow­er­ful bank­ing lobby, Mr Car­ney told a par­lia­men­tary com­mit­tee that cer­tain “in­sti­tu­tions would be in a po­si­tion to ad­just some ac­tiv­i­ties over the course of the next year if they saw fit”.

He added, “There is some un­cer­tainty, vary­ing de­grees of un­cer­tainty, gen­uine un­cer­tainty about the fu­ture ar­range­ments.”

An­thony Browne, chief ex­ec­u­tive of the Bri­tish Bankers’ As­so­ci­a­tion, said in a re­cent news­pa­per ar­ti­cle that bankers are ready­ing to re­lo­cate some op­er­a­tions out­side Bri­tain as early as 2017, fear­ing that un­cer­tainty.

Ad­dress­ing MPs on Oc­to­ber 25, Bri­tain’s fi­nance min­is­ter Philip Hammond in­sisted that he had “been seek­ing to re­as­sure” the coun­try’s fi­nan­cial sec­tor that the gov­ern­ment “will put their needs at the heart of our ne­go­ti­a­tion with the EU”.

Mr Browne mean­while sug­gested that banks were un­cer­tain about whether they would be able to of­fer ser­vices across Europe once Bri­tain leaves the EU in 2019, so were ready­ing for all even­tu­al­i­ties.

Mr Browne said banks based in the UK were lend­ing £1.1 tril­lion (US$1.3 tril­lion) to com­pa­nies and gov­ern­ments in the rest of the Euro­pean Union, “keep­ing the con­ti­nent afloat fi­nan­cially”.

Free trade in fi­nan­cial ser­vices be­tween Bri­tain and con­ti­nen­tal Europe was worth more than £20 bil­lion, he said.

Mean­while the “pass­port” rights al­low­ing 5500 Bri­tish-based fi­nan­cial firms to op­er­ate freely across the Euro­pean sin­gle mar­ket are at stake in the fall­out from Brexit, pos­ing a “sig­nif­i­cant” risk to the fi­nance sec­tor, the coun­try’s fi­nan­cial watch­dog re­vealed last month.

Some 8000 fi­nan­cial firms based else­where in the Euro­pean Union also do busi­ness in Bri­tain via pass­port­ing, and their rights are like­wise threat­ened, data from the Fi­nan­cial Con­duct Au­thor­ity reg­u­la­tor showed.

The pass­port scheme al­lows com­pa­nies to do busi­ness across the 28-na­tion Euro­pean Union and the 31-strong Euro­pean Eco­nomic Area which also in­cludes Ice­land, Liechtenstein and Nor­way. –

Photo: EPA

Mark Car­ney ac­knowl­edges that there is some un­cer­tainty.

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