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 Sunday’s 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.”
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 politics 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.
The 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 crippling implications for the UK’s banking sector.
“We know there is huge concern about this in the Treasury,” Sky News’ senior political correspondent Beth Rigby says.
“There are some signs that some banks are beginning to vote with their feet.”
They include Goldman Sachs, which she says is reported to be drawing up plans to move 2,000 jobs out of London to another financial centre in the EU.
Despite the warnings however, Mr Browne said he doesn’t believe the UK’s finance industry will be irreparably damaged.
“London will survive as a global financial centre. Finance is inventive and will find a way through,” he said.
“But putting up barriers to the trade in financial services across the Channel will make us all worse off, not just in the UK but in mainland Europe.”
(c) Sky News 2016: Top banks planning to move abroad over Brexit fears – banking boss