Close to three-quarters of executives at UK-based banks think that London will still be the continent’s financial centre in five years, according to a November 2 survey published by consultancies Synechron and Tabb Group, which surveyed 80 individuals in September.
That is despite executives’ acknowledgement of the upheaval likely to be caused as the UK moves nearer to exiting the bloc.
The survey found 78% of respondents predicting Brexit will have a negative effect on the UK’s financial markets – but even more (82%) said it would hurt the EU. Compliance costs will rise, according to 56% of the bankers.
A slight majority of bankers said their firms had now set up Brexit steering committees to discuss the ways in which Brexit could affect their businesses.
Anthony Browne, chief executive of the British Bankers Association, said at an event in October that he expected banks to start moving jobs from the UK “in the coming months” and that international bank bosses were “planning for the worst case scenario” with their hands “poised, quivering, over the relocate button”.
Key to banks’ decisions over whether and when to move staff is the timing of negotiations between the UK and EU. Bankers including HSBC’s co-head of global banking Matthew Westerman have spoken of the importance of a transition period between the UK leaving the EU and any new business and regulatory regime kicking in. Without that, some bankers have said, firms may decide sooner rather than later to shift staff and business to another European country.
But some have expressed doubts that such a transition period will be granted. The London-based boss of one international investment bank told FN there was a “low chance” of a transition period being agreed upfront. He added that many banks would be forced to decide whether to relocate staff long before the UK’s exit from the union.