May pledges to make Brexit priority of financial services

Financial services have been made a priority for the UK government in the continuing Brexit negotiations. Theresa May met with financial leaders to discuss the opportunities and challenges of Brexit.

No. 10 Downing Street
Prime Minister Theresa May has pledged to make the future of financial services a priority in Brexit talks in a bid to minimise the number of jobs banks are planning to relocate from London to new European hubs once the UK has left the EU.

UK’s status as financial centre

In a meeting with senior, international bank officials, insurers and financial infrastructure executives in Downing Street, Mrs May urged them to “emphasise the benefits” of preserving the UK’s status as Europe’s key financial centre when meeting with officials from EU cities hoping to establish rival EU hubs.Many institutions are looking at establishing hubs elsewhere in Europe amid continuing fears that, after Brexit, Britain will lose the ‘passporting rights’ that currently enable their London bases to operate freely across the continent.Among the executives meeting with Mrs May and Chancellor of the Exchequer Philip Hammond were Mark Tucker, chairman of HSBC; Axel Weber, the UBS chairman; Barclays chief executive Jes Staley; and Richard Gnodde, chief executive of Goldman Sachs International.
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Financial challenges of Brexit

After the meeting, a Downing Street spokesman said that discussions had centred on the “opportunities and challenges” posed by Brexit, with Mrs May giving an overview of the UK’s negotiating position including the plan to aim to agree on a two-year transitional period.“The business leaders were united in emphasising the need for as much certainty as possible,” the spokesman said. “The conclusion of phase one talks were deemed to have provided reassurance and the business leaders gave their views on how to maximise the benefits of an implementation period.“The prime minister asked that in their conversations in European capitals, the attendees emphasise the benefits for Europe as a whole of the UK’s financial centre.”
Discussion at the meeting focused on ways to retain and improve London’s post-Brexit standing as a premier global financial hub with Mr Staley understood to have told MRs May that Britain’s tax regime was uncompetitive and that more should be done to make it more attractive.“It was an encouraging, positive meeting,” one banker familiar with the talks said afterwards. “The whole point of the meeting was to say to us, ‘Look we (the government) know you feel we haven’t prioritised you so far in the negotiations, but we will’.”

Predicted job relocations

Last month, a survey of financial services firms in London found that plans were in hand to relocate 10,500 jobs abroad by the time the UK leaves the EU at the end of March next year.The EY ‘Brexit Tracker’, based on a survey of 222 banks and financial services firms in the City, found that 26 of them had now declared an intention to move staff abroad, up from 12 in the December 2016 report. In all, 68 firms have either publicly confirmed plans to move staff and have said they were still considering it.However, the tally of actual posts confirmed as being relocated to new European hubs under contingency plans was down from last year’s estimate of 12,500 to 10,500 now.Bloomberg reported on Friday that Goldman Sachs, JPMorgan Chase and Morgan Stanley had embarked on a hiring drive in Frankfurt to boost new headquarters inside the European Union in time for Brexit.The report said the biggest Wall Street firms have recently started advertising for scores of staff ranging from risk managers to compliance officers and information technology specialists.
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