HSBC likely to be only the first of a partial EU bank migration
Comment Martin Flanagan
The problem with secondguessing bankers is that conscious inscrutability is in the DNA. Even if they are worried about something, they cannot fully let on in case it translates as uncertainty, and uncertainty and people’s money are not natural bedmates.
But my guess is that HSBC boss Stuart Gulliver will not be the only one breaking cover soon with plans to ship a relatively significant number of workers to the EU following Theresa May’s clear outline of her Brexit plans for Britain: no membership of the single market, no jurisdiction of the European Court of Justice and no freedom of movement.
The PM does not seek for Britain to become a member of the so-called European Economic Area (like Norway) because it comes with the prerequisite of freedom of movement. She does not want us to be a member of the European customs union (like Turkey) because although it would give us control of our borders we would not have the freedom to conclude trade deals of our own with other parts of the world in an unlikely new imperial Britannica.
That would suggest May would like to have some sort of associate membership of the customs union – the a la carte menu as the Europeans dismiss it or having our gateau and eating it if you prefer Boris Johnson’s language.
Bankers could be forgiven for thinking it is looking like a nebulous dog’s breakfast, and decide to make their plans like HSBC accordingly. It took the EU more than seven years to conclude a trade deal with Canada, and there was goodwill on both sides. And Britain is going to conclude one in two years from when Article 50 is launched this March, plus another two years, say, of transitional arrangements to smooth the way? Looks a long-shot.
Banks might just decide too long a shot, and shift jobs to ensure at least a goodly proportion of their business survives in the EU whatever the upshot of talks.
It will be particularly interesting to see what the big US banks in the City of London do. I don’t believe they can take the chance on a stunningly good trade deal for the UK with the EU. It might happen. But bankers are conservative creatures and operate as a herd (sub-prime lending, Libor-rigging etc). They might feel Gulliver at HSBC has it right.