Banks hope to keep staff in London if soft Brexit deal struck

Banks which are shifting operations to avoid disruption once Britain leaves the European Union hope only a handful of people will eventually have to leave London, industry sources say.

Wall Street’s Citigroup Inc. and Morgan Stanley as well as Britain’s Barclays have all in the last week indicated they are finalising plans to set up subsidiaries within the EU.

Along with other banks, they are planning for a worst-case scenario as they say they do not have time to wait to see how Britain’s talks with Brussels unfold.

They are focussed on ensuring they have the right legal and operational framework to do business in the EU if Britain fails to negotiate a favourable exit deal, banking executives say.

But they are holding off on implementing plans to move a significant number of people, cautious that some of their contingency plans may never need to be enacted.

A senior executive at one British bank told Reuters he was reluctantly spending a few hundred million pounds building a new EU base as cheaply and quickly as possible.

“It’s an insurance policy. I just have to figure out what the cheapest insurance policy is … in a perfect world, we will just tear it up,” he said.

The timetable for setting up EU bases and operations is tight because it could take longer than eighteen months to arrange office space, obtain licenses and build up capital.

Source: Reuters.com