Morgan Stanley’s Kelleher says the UK will ‘suffer as a result of Brexit’
The Irish-born president of financial services giant Morgan Stanley has warned that the City of London will suffer as a result of Brexit.
Colm Kelleher, who is widely tipped to be in line take the top chief executive role at the Wall Street bank, said yesterday that some financial firms will pull their headquarters out of the UK unless passporting arrangements, which allow firms based in one EU nation to operate across the bloc, are retained.
The Irish Independent learned yesterday that the European Commission is set to insist that London banks lose those passporting rights, unless Britain remains in the single market – including allowing free movement of workers.
Mr Kelleher told BBC Radio 4’s Today programme that Brexit is causing a lot of uncertainty that will slow down investment into the UK.
“It is that uncertainty which is causing problems, you’ll see a slowdown in investment into the UK because people, corporations, like certainty before they invest.
“So the sooner we get some clarity on where we are heading, the better,” he said.
“I believe, and I have said prior to the referendum, that the City of London will suffer as a result of Brexit – the issue is how much.
“I’m convinced that London will retain its reputation and prestige as a global financial services centre, but clearly some size of our businesses will have to be moved out of London into Europe, into European headquarters, with the absence of any passporting agreement.
“But it’s very hard to ascertain what that means at the moment. I do think generally though that capital markets in Europe will shrink as a consequence of this.”
He said Morgan Stanley has urged the British Government and Brussels to ensure a long transitional period is built in to the deal so firms have time to adjust.
The same concern was echoed by Rob Kapito, president of global investment corporation BlackRock on BBC’s Today programme. “There is a lot of concern about Brexit,” he said. (Additional reporting Press Association)