BRUIN Financial Comment on BREXIT
London, along with New York, is one of the world’s undisputed global financial centres, well ahead of the Eurozone’s two most significant centres Frankfurt and Paris. Retaining this position will be the challenge for stakeholders in maintaining exports of over £60bn in a sector crucial to the global economy.
Many foreign financial institutions have a UK presence so as to participate in the UK financial market, but a large number of non-EU financial institutions also use the UK as a hub to access clients and markets across the EU. One of the major attractions is the access to the Single Market via the passporting regime, which membership to the EU provides. Losing the benefits of passporting would have significant impact on UK authorised banks to offer products and services for EU clients.
Campaigning organisation TheCity UK estimates there are circa 729,000 finance and finance related jobs in London, with the overseas banks that currently employ around 115,000 likely to review the set up of their operations in the UK following the results of the referendum.
However, the outcome of the vote will now result in negotiations that are expected to take months and more likely years before there is clarity on the outcome for UK-based financial services firms. This will no doubt include changes to regulation with as yet an unclear view as to what adjustments will be needed to secure access to EU countries.
Whilst the impact of the uncertainty has already been felt in the lead up to the referendum, history has taught us that the UK financial services sector is resilient and adaptable to change. Indeed, there is an argument that the result may offer the opportunity for banks to work alongside regulators, investors and clients to draft a new framework agreement that is fit for purpose – not just in terms of the UK’s relationship with EU countries, but with specific focus on the UK’s role as a global financial centre.
In advance of the referendum BRUIN conducted indepth research into the nationality diversity of placed candidates. Read the report here and for more information please contact your Consultant.