Bri­tain ex­pects 5,000 fi­nan­cial ser­vices jobs to leave on Brexit

Business World - - World Business -

LON­DON — De­spite thou­sands of jobs set to move to the con­ti­nent due to Brexit, Bri­tain’s fi­nan­cial ser­vices min­is­ter said on Wed­nes­day he would do all he can to en­sure the City of Lon­don re­mains a ma­jor fi­nan­cial cen­ter.

John Glen told law­mak­ers that he agreed with Bank of Eng­land (BoE) es­ti­mates that 5,000 fi­nan­cial ser­vices jobs will have moved to con­ti­nen­tal Europe by the time Bri­tain is due to leave the Euro­pean Union (EU) next March.

Un­sure of Bri­tain’s fu­ture trad­ing re­la­tions with the EU, fi­nan­cial firms in the UK are look­ing to open hubs in Paris, Frank­furt and else­where by March, and Glen sin­gled out France for try­ing to ex­ploit un­cer­tainty over Brexit.

While ac­knowl­edg­ing there had not yet been “whole­sale moves of large in­sti­tu­tions” to other cities, Mr. Glen said: “Clearly we are in a dy­namic ne­go­ti­a­tion where the French in par­tic­u­lar have sought to lever­age as much ad­van­tage due to the un­cer­tainty.”

“My sole ob­jec­tive in re­spect of the City is to en­sure as much con­ti­nu­ity as pos­si­ble in re­spect of the eco­nomic value that is able to be gen­er­ated by the City,” Mr. Glen told a com­mit­tee in par­lia­ment’s House of Lords.

Reuters re­ported last month that as few as 630 UK-based fi­nance jobs had al­ready been shifted or cre­ated over­seas with just six months to go be­fore Brexit. France has said it ex­pects Lon­don to re­main a ma­jor fi­nan­cial cen­ter.

Mr. Glen said he “fully ex­pects” that Bri­tain and the EU will agree on a deal that would in­tro­duce a tran­si­tion pe­riod from next March to avoid a dis­or­derly Brexit.

But he warned: “If there was an un­sat­is­fac­tory environment for the City of Lon­don then we would need to take ap­pro­pri­ate action to de­fend our in­ter­ests.”

Some law­mak­ers want Bri­tain to en­sure that reg­u­la­tion af­ter Brexit will not crimp the City’s global com­pet­i­tive­ness.

While the BoE said on Tues­day it was com­mit­ted to “ro­bust” stan­dards, Mr. Glen told the law­mak­ers there was a need to over­see the City in a way that “prizes com­pet­i­tive­ness.”

Bri­tain’s reg­u­la­tory bod­ies would be re­viewed in the next two years, he added.

BI­LAT­ERAL AGREE­MENT

Bri­tain’s fi­nan­cial sec­tor gen­er­ates more than £70 bil­lion ($92 bil­lion) in tax rev­enues, with the EU its big­gest sin­gle ex­port mar­ket.

Mr. Glen said the fo­cus was on se­cur­ing a bi­lat­eral agree­ment with the EU to in­ject cer­tainty into the bloc’s ex­ist­ing sys­tem of fi­nan­cial mar­ket ac­cess known as equiv­a­lence.

Equiv­a­lence, used by Sin­ga­pore, Ja­pan and the US, refers to Brus­sels grant­ing mar­ket ac­cess to for­eign banks and in­sur­ers if their home rules are aligned enough with those in force in the bloc.

Bri­tain, how­ever, wants a bi­lat­eral agree­ment with the EU to re­strain Brus­sels from scrap­ping fi­nan­cial mar­ket ac­cess at short no­tice, Mr. Glen said.

“We can­not be sub­ject to a sit­u­a­tion where there is politi­ciza­tion of equiv­a­lence and our fi­nan­cial in­sti­tu­tions would be vul­ner­a­ble,” Mr. Glen said. —

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