The European Central Bank was talking to banks looking to move some operations from London to the eurozone following Britain’s decision to leave the European Union, ECB board member Sabine Lautenschlaeger said yesterday.
Maintaining a presence in the EU would allow banks to sell across the bloc of 450 million people while staying under a single supervision, keeping a lid on costs and the complexity of operations.
Goldman Sachs is considering shifting some operations to Frankfurt as a result of the vote, which could mean banks lose their passports or automatic right to do business in the EU.
The City’s open access to the EU market is worth about £10 billion a year to the British economy
“We have already many banks asking for interviews and meetings so that they can identify where are our pressure points and where our methods differ from [Britain’s Prudential Regulation Authority] methods,” Lautenschlaeger told a conference in Frankfurt. “For sure we are preparing.”
British Prime Minister Theresa May has said she would trigger formal talks to leave the bloc by the end of March 2017 after the June Brexit referendum.
Top bankers said last month they could start moving staff abroad as early as next year if there were no clarity on whether Britain would retain access to the European single market when it leaves the EU.
Lobbyists say the City’s open access to the EU market is worth about £10 billion a year to the British economy and is crucial for the financial hub of London.
Banks are keen to retain passporting rights and have been unsettled by comments by May that appeared to prioritise capping immigration over retaining access to the single market.
The government is deeply divided over its plans for Britain’s future relationship with the bloc, according to a memo for the government leaked to the Times newspaper.
“We have a working group, a task force which looks into all the different scenarios, thinking about what it means with regard to passporting or non-passporting, authorisation, model approval and, by the way… what kind of preparation can be made with our colleagues at the PRA,” the ECB board member said.