London finance chief remains positive after Brexit trigger

This article is more than 12 months old

LONDON: The outlook for London's financial sector has improved since Brexit was triggered, insisted the man charged with its policy, even as banks remain set to move some jobs abroad.

Mr Mark Boleat, who spoke to AFP after British Prime Minister Theresa May activated the process for Britain's exit from the European Union (EU), nevertheless urged speedy trade talks to minimise disruption.

"On the whole, I think things are looking rather better," Mr Boleat said, when asked about the impact on London's financial sector, otherwise known as the City.

"We would hope that the negotiations go quickly and well."

If early agreement could be reached on the terms for exit and rights of EU nationals, "there will be the minimum of disruption to business and consumers in this country and in Europe", said Mr Boleat, who will step down next month as policy chairman of the City of London Corporation.

Bank of England chief Governor Mark Carney on Friday warned of sector-wide consequences of leaving without a trade deal, but he was optimistic about an agreement.

In the run-up to last year's Brexit referendum, the business community threw its weight behind the Remain campaign, arguing it would prompt large-scale City job losses.

So far, HSBC has stated it would likely shift 1,000 jobs to Paris, where the banking titan already has a significant operation, and US player Goldman Sachs will move 1,000 staff from London to Frankfurt.

But Mr Boleat sought to calm jitters over banks shifting jobs to other major European hubs.

"Banks have had contingency plans since before the Brexit referendum, in some cases. They have known there is a possibility that Britain will not be in the single market - that has now been confirmed," he said.

Many banks "will need to restructure what they are doing - perhaps cease doing a few things, in some cases build up business elsewhere in the EU. They are getting on and doing that," he said.

He cited US investment bank JPMorgan's chief executive Jamie Dimon, who stated this week that he did not foresee shifting many staff from Britain over the next two years because of Brexit.

"I do not think businesses are going to announce what they are doing in a great fanfare," Mr Boleat said.

As executives such as Mr Dimon had pointed out, "we are going to need to build up our resources in other EU member states".

Insurance market Lloyd's of London was the first group to respond to the Brexit trigger, announcing it will open a Brussels subsidiary in early 2019.

The market, which insures against catastrophes such as earthquakes and shipwrecks, is seeking to ensure its continued access across the bloc.

Lloyd's of London is "a unique organisation. It is not a company, it is a market. They will have to do something if Britain is outside the single market," said Mr Boleat.

"It is Lloyd's of London. The vast bulk of its business will stay in London. It will not be Lloyd's of Brussels."

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