EU pressuring bank bosses to move out of London – because too few have left

Brexit: Expert explains why UK won’t rejoin EU

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The major bank launched an investigation, which found some large international banks have not moved sufficient numbers of senior staff to nations across the continent after the UK voted to unshackle itself from the EU. Despite warnings Brexit would risk hurting Britain’s finance, this is now likely to lead to increased pressure on foreign banks to relocate more jobs from London to other nations in Europe.

Banks will now be asked to appoint new senior staff, change where some are located, or change their group structures.

It comes after the ECB launched a desk-mapping exercise, which analyses where banks’ resources are based particularly around trading and risk-management.

Executives were said to have been reluctant to move from London to Dublin, Frankfurt or Paris.

The desk mapping included US firms such as Bank of America, Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley, as well as institutions from other third countries such as Barclays, HSBC and UBS.

Britain’s financial sector lost most of its access to the EU, which had been its single biggest export customer, after completing its exit from the bloc a year ago.

But Brussels granted its banks temporary access to London’s clearing houses, which was extended for three years at the start of 2022.

This means the bulk of Europe’s €660 trillion (£557.18tr) clearing market is handled in the City of London.

Catherine McGuinness, whose five-year term as policy chief for the ‘Square Mile’ financial district ends in May, said that while the UK has adapted smoothly to Brexit, they were still working through the full implications.

Ms McGuinness said that while some 7,400 finance jobs, far fewer than initially predicted, have moved from London to new EU banking hubs, COVID-19 “may be masking what’s really going on”.

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She said banks in London were still committed to having operations in the capital despite voicing frustration at the cost and time of running duplicate British and EU hubs.

Ms McGuinness said: “We are certainly not at a new normal.

“We need to put Brexit behind us.

“What really matters now is maintaining our competitive edge in future.”

Additional reporting Monika Pallenberg

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