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Banker warns City about relocating over Brexit | City & Business | Finance


Cavendish Asset Management fund manager Paul Mumford said: “While there is some sound and fury regarding moves to Paris and Frankfurt, everything is still very cautious and exploratory.

“It’s no small thing to simply set up in another city with 500 or however many people.”

The comments come after City bankers had been raising concerns over the progress of securing a Brexit deal with the EU and securing banking and finance jobs.

It was revealed on Saturday that European banks had removed a whopping £313.2 billion worth of assets from their balance sheets, representing a fall of 17 per cent.

Financial analysts have indicated that the banks are protecting themselves against the possibility that the UK may be forced into withdrawing from the Brexit talks with the European Union, resulting in a ‘no deal’ scenario, which would create uncertainty over existing financial contracts.

Banks in the other 27 EU countries have reduced their total assets tied to the UK from €1.94tn to €1.59tn between June 2016 and June 2017, according to official European Union data.

The British Government is currently engaged in a charm offensive in an effort to retain the financial services.

Banking and finance is a key sector for the UK, contributing 10.7 per cent of the UK’s entire economy.

Chancellor Philip Hammond used his Budget last week to reassure Britain’s £7 trillion asset management sector that it was going to get more attention after Brexit, while Theresa May met with Jamie Dimon, the boss of US bank JP Morgan, two weeks ago.

Brexit Secretary David Davis also delivered a speech at the London headquarters of Swiss bank UBS earlier this month.

But some bankers have remained wary of the Government’s reassurances.

Stephen Burke, director at consultant Cordium, said: “Whatever the outcome of Brexit negotiations, the EU27 have already won business from the City and now it is just a question of how much.”

One key issue for the City is passporting rights which allow firms to offer services across the EU member states.

Michel Barnier, the EU’s chief negotiator, made clear last week that those passports will not be valid post-Brexit.

He said: “On financial services, UK voices suggest that Brexit does not mean Brexit. Brexit means Brexit – everywhere. They say there would be no changes in market access for UK established firms, they say that joint UK-EU rules would be decided in a new symmetrical process between the EU and the UK and outside of the jurisdictions of the ECJ.

“This would contradict the April European Council guidelines which stress the autonomy of the EU decision making, the integrity of our legal order and of the Single Market. The legal consequences of Brexit is that the UK financial service providers lose their EU passport.

“This passport allows them to offer their services to a market of 500 million consumers and 22 million businesses, but the EU will have the possibility to judge some UK rules as equivalent based on a proportional and risk based approach.”  



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