London banks nearing decision on Brexit moves

As Britain prepares to negotiate its EU departure, a number of banks are likely to decide within two months where to set up new continental bases to make sure they can keep serving clients in the bloc after Brexit.

The ECB said it will host a meeting of banks on May 4 at its offices in Frankfurt. It will spell out in detail what those moving some of their operations out of London must do to apply successfully for a licence.

Talks with financial authorities have been under way for several months but the banks are expected to make up their minds imminently on where to move staff and operations.

“We are in the hot phase. In the next six to eight weeks there will be a series of decisions,” Felix Hufeld, head of Germany’s Bafin financial regulator said.

Ireland’s central bank will hold a similar gathering next month to advise groups considering a move to Dublin, which along with Frankfurt, Paris, and other centres is competing to offer the banks a second base that remains in the EU.

A spokeswoman for the Irish Central Bank added it had regular contact with the industry concerning “the potential consequences of Brexit”.

Authorities expect potentially dozens of international banking groups, currently operating their eurozone business out of London, to move some operations and staff to the 19-member eurozone.

They are likely to shift several thousand staff out of London, as banks based in Europe’s biggest financial centre will lose automatic “passporting” rights to sell services across the EU when Britain is no longer a member state.

Mr Hufeld predicted Frankfurt would play an “important role” in this process. Bankers also say Frankfurt is set to win the most business following a discreet but concerted German campaign to promote the financial centre of Europe’s biggest economy.

German politicians have been reluctant to lobby publicly for big global banks to move to the country. Federal elections will be held in September and some voters remain suspicious of the financial industry after several German banks were forced to seek taxpayer-funded bailouts during the global crisis.

However, they have held a series of meetings with bank executives. Finance minister Wolfgang Schaeuble and politicians from the state of Hesse, home to Frankfurt, have met Wall Street powerbrokers in recent months, according to sources.

Reuters