Top banks planning to move abroad over Brexit fears, says UK banking boss

Anthony Browne says banks have been left rattled by the tone of negotiations

Top banks planning to move abroad over Brexit fears, says UK banking boss

General view from the 38th floor of the Heron Tower in London city | Image: Sophie Duval EMPICS Entertainment

Britain's biggest banks are preparing to move out of the UK amid growing fears over the ramifications of leaving the European Union, a top banking boss has warned.

The head of the British Bankers' Association, Anthony Browne, said "many smaller banks" are planning to move their operations overseas before Christmas.

Larger institutions, he said, are expected to follow within the first few months of 2017.

"Their hands are quivering over the relocate button," he writes in The Observer.

"Banking is probably more affected by Brexit than any other sector of the economy, both in the degree of impact and the scale of the implications," he said.

Mr Browne said banks have been left rattled by the tone of Brexit negotiations so far.

He said the rhetoric coming from EU and British politicians is "hardening" and uncertainty over the deal that will ultimately be agreed has left them with little option but to take steps to protect their futures.

"Most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers, the date by which this must happen and how best to do it," he said.

'A range of potential impacts'

He writes: "It is understandable that other European cities want to attract jobs from London. Delegations from Frankfurt, Paris, Dublin and Madrid are all coming to the UK to pitch to bankers.

"I am pro-competition, and long may they try to make their labour market and fiscal policy more attractive to international investors.

"That is not the problem. The problem comes when national governments try to use the EU exit negotiations to build walls across the Channel to split Europe’s integrated financial market in two, in order to force jobs from London."

The British government's desire to take control of freedom of movement of people into the UK means it is highly likely Britain will lose access to the single market.

Membership of the single market - a key feature of being in the European Union - is crucial to banks due to what is called "passporting services".

This allows UK-based banks to sell financial services to all EU member states unimpeded. As a result many US investment banks base themselves in London as a global financial centre.

Losing "passporting" rights would therefore have potentially crippling implications for the UK's banking sector.

A British government spokesman said "large numbers of officials" are considering a range of potential impacts on financial services and other sectors.

He added: "We are determined to maintain the City's leading position as one of the key centres of global finance as we make a success out of Brexit."