Wednesday, 16 November 2016

ECB talking to London-based banks over EU access post-Brexit

In World Economy News 16/11/2016

European central bank ECB 2.jpg
Headquarters of the European Central Bank (ECB) are illuminated with a giant euro sign at the start of the
The European Central Bank is talking to banks looking to move some operations from London to the euro zone following Britain’s decision to leave the European Union, ECB board member Sabine Lautenschlaeger said.

Maintaining a presence in the European Union 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.
“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 will 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 is no clarity on whether Britain will 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 pounds ($12 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 prioritize 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, authorization, model approval and, by the way … what kind of preparation can be made with our colleagues at the PRA,” the ECB board member said.

Source: Reuters (Reporting by Francesco Canepa; Writing by Balazs Koranyi; Editing by Jon Boyle)