Top international bankers have warned they could start moving staff out of Britain as early as next year.
They said that would happen if there is no clarity on whether the UK will retain access to the European single market when it leaves the EU.
The warnings came from senior executives of European divisions of some of the world’s biggest financial institutions while they were taking part in the UK Financial Services Brexit Summit in London.
James Bardrick, the UK head of US bank Citi, and Rob Rooney, the chief executive of Morgan Stanley international, expressed concerns about their rights to sell financial services across the EU, known as ‘passporting’.
Bardrick asked: “How do we and when do we start making decisions … knowing the plan is ready to go … it could be in the first quarter of 2017.”
“It really isn’t terribly complicated. If we are outside the EU and we don’t have what would be a stable and long-term commitment to access the single market then a lot of the things we do today in London, we’d have to do inside the EU 27,” said Rooney as he indicated that Brexit could make markets less stable and increase costs for banks.
The future of London as Europe’s financial centre is expected to be a major negotiating point in Britain’s talks with its EU partners.
Wrong tone threatens open culture
Tim Roberts, managing director of consulting firm Promontory Financial Group, said London began to rival New York as a financial centre in the 1980s because it welcomed people regardless of their nationality or gender.
“If we lose that, and we allow not Brexit itself, but some of the sentiments expressed nationally that led up to the referendum to erode that culture then I think it damages London as a financial centre,” Roberts said.
The chairman of the Lloyd’s of London insurance market John Nelson criticised the tone of language that has been used by government ministers, and said Britain risked turning its back on the global economy for the first time since World War Two.
“We have to be very clear that the rest of the world is looking very, very closely right now,” Nelson said.
“We have to be careful that we keep the UK open… and making sure we are able to attract the right talent globally. If we don’t do that we will not remain the financial sector that we are today.”