Banks ready to ‘adjust’ over Brexit
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. –
Mark Carney acknowledges that there is some uncertainty.