Late Brexit concession for banks unlikely
Britain may have left it too late to convince major banks that it can strike a deal to soften the impact of Brexit before they start shifting jobs from London.
Top executives at five of the largest banks in the capital said a staggered deal on leaving the European Union is only likely to be agreed late on in talks with Brussels, meaning they have already begun relocating staff.
And a more conciliatory government tone towards business, having largely refrained from engaging with corporate leaders about Brexit ahead of last month’s election may be too late.
“The timeframe for when we wanted a transitional deal has already passed,” an executive at one global bank said, adding it had taken a decision to move hundreds of roles to continental Europe regardless of what the government does.
The finance minister Philip Hammond said last week that Britain should push for a transitional deal to help businesses, while the government held its first high level meeting with corporate leaders in months to discuss Brexit.
But James Bardrick, the UK head of the US bank Citi, said the government has been too slow to get any early deals with Europe and banks will have to be ready by September 2018.
“There’s been a lot of talk and not a lot of action for a long time. I am anxious it is all a bit late,” Mr Bardrick said.
Executives say the timetable to relocate staff and operations is tighter than it looks because it could take longer than eighteen months to set up new buildings, get licenses, hire or relocate staff and build up the capital of EU divisions.
The chairman of one of Britain’s largest banks said he recently resisted pressure from staff to enact his company’s contingency plan, but he will probably have to give the go-ahead by the end of the summer.
“Every single day I have people coming into my office asking me to press the button on contingency plans,” he said.
The Bank of England governor Mark Carney has also previously said that banks will have to begin relocating activities to other countries by September.
Mr Carney has asked banks to show by Friday how they can avoid their customers being abruptly cut off after Brexit, which bankers say may inadvertently speed up the departure of jobs from Britain.
The department for exiting the EU did not immediately respond to a request for comment.