by Sinead Cruise, Andrew MacAskill and Lawrence White
LONDON (Reuters) – For the 2.2 million employees in the UK banking and financial sector, the vote in favor of leaving the UK European Union (EU) opened a long period of heavy uncertainties threats on employment and on the ability of the City to remain the main European financial center.
the British banking and financials plunged from the results of the referendum known, the top five institutions of the country falling by an average of 13.4% and large asset managers like Schroders, Aberdeen asset Management or St. James’s Place dropping from 12% to 14%.
They brought with them all the European banking stocks whose benchmark index lost nearly 14% late in the session, falling twice as strong as that of all European values .
the fate of the British financial industry depend on divorce terms negotiated between London and the remaining 27 EU countries, in particular the “European passport”, which allows institutions located in one of the member countries to provide financial services in all the others.
London has battled for years, including within the European institutions, to try to protect its financial system regulations considered as potentially harmful to the international competitiveness of the City.
COMPLIANCE wITH EU AND EUROPEAN pASSPORT
the preservation of the benefits of “European passport” could now spend more than ever by the rules set by the EU.
the financial Conduct authority, Bank and British financial supervisory authority, has also said on Friday the establishments it is responsible to continue to prepare for the European regulations to take effect.
the Director of Corporate Affairs of the City of London Corporation, which especially defends the interests of the financial community, has ruled that the vote in favor of Brexit lead to throw the European financial regulation nettle.
“the City is not very enthusiastic about the idea to throw away the rules. The financial rules will not change, “said Mark Boleat Reuters.
While proponents of Brexit have made immigration control one of their warhorses, freedom of movement for EU nationals in Britain could also be among the counterparties to the preservation of the European passport.
“There will be no freedom of capital movements for the City without freedom movement for people within the common market. Maybe he will take some time for everyone to understand that in Britain, “warned Sven Giegold, a German Green MEP.
For now, the atmosphere in restaurants and cafes in the area of finance at Canary Wharf, where the towers are located JPMorgan, Citi, HSBC and Barclays other, is both serious and worried, with job security high on the agenda.
the big investment banks had said before the referendum that they could move thousands of jobs if Brexit and the European Central Bank warned that the issue of the location of the market for euro in London, the world leader for trading in foreign exchange, would arise.
SINGLE MARKET ACCESS CRITICAL fOR EMPLOYMENT
Several bankers have sought to allay fears by emphasizing the emergency plans that have been developed for months and experience accumulated over the years in the field of crisis management.
Lloyd Blankfein, chairman of Goldman Sachs, and Jes Staley, CEO of Barclays, underscored the resilience of their institutions and Douglas Flint, chairman of HSBC, said that negotiations to define the new terms of trade agreements with European and international partners would be complex and take time.
Morgan Stanley said that the scope of the vote could not be assessed for some time. The US bank could move a thousand of its 6,000 employees in Britain elsewhere in Europe, however, said a source familiar with the matter before the referendum.
In Edinburgh, Britain’s second financial center, some see the referendum results the opportunity of a new beginning, with possible transfers to foreign banks that used London as their European bridgehead.
“I have contacts in London who tell me that some major financial firms have asked their lawyers to be interested in Edinburgh as a hub, “said Gordon MacIntyre-Kemp, CEO of Business for Scotland, adding that he expects a new referendum on independence Scotland 2020.
Almost two thirds of Scots voted in favor of maintaining the EU and Nicola Sturgeon, the Scottish First Minister and leader of the nationalist party said Friday that a new referendum on independence was very likely.
the City of London Corporation said the EU output should not result in a mass exodus of banks.
” There will be no mass exodus of banks and financial institutions in the City, “said Mark Boleat.
however, he stressed that access to the European single market would be crucial for the employment in the UK banking sector.
“in terms of job losses, it is the access to the single market is vital. If access is not secure, there will be job losses, “he warned.
(with Huw Jones, Marc Joanny for the French service, edited by Marc Angrand )
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