Tuesday 16 January 2018

City of London sees Brexit risk as slow burner, rather than big bang

David Cameron has promised to renegotiate Britain's relationship with the EU countries
David Cameron has promised to renegotiate Britain's relationship with the EU countries

Guy Faulconbridge and Jamie McGeever

A British exit from the European Union would gradually sap what is now the world's financial capital of wealth and power but there would be no stampede of bankers and traders to rival centres, the City of London's policy chief told Reuters.

UK Prime Minister David Cameron has promised to renegotiate Britain's relationship with the 28-member EU and hold a referendum on membership by the end of 2017.

Some investors and chief executives have warned that leaving the bloc would be politically and economically costly for Britain.

Marc Boleat, who leads the City of London Corporation, overseeing London's historic financial district, said an exit vote would lead to years of 'divorce' negotiations during which London risked losing business.

"Brexit would lead to considerable uncertainty, with a threat if we could not get good exit terms of, over a period of years, the City of London being smaller than it otherwise would have been," he said in an interview.

"The question is not whether London is still a financial centre - I can guarantee it will be in many years' time. The question is what size is it, are we getting bigger or smaller, are we getting more jobs?

"Over a period of years it would be a smaller centre than it otherwise would have been," Boleat said of the impact of leaving the European Union.

London is rivalled a financial capital only by New York.

Boleat said the City wanted the British government to get assurances over the integrity of the single market and protection against discrimination for companies based in EU members such as Britain which chose not to join the euro.

"That is what we are most concerned about and what we would like the government to concentrate on in the negotiations that are about to happen. That is absolutely critical."

Boleat said a Brexit vote would not "mean Goldman Sachs, or JP Morgan or Citi are going to say: 'Oh, close down.'"

"But it would mean ... as they have to take location decisions as leases come up, or they have to expand or contract, if it was more expensive to do business from London or if they couldn't do business from London, then over time there would be a move."

The Bank of England and many big banks are trying to assess what a Brexit would mean for their businesses.

Irish Independent

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