UK loses lb900bn as Brexit harm to city worse than expected
A new report has found the hit towards the Town of London from Brexit so far has been worse than expected, with banking institutions moving lb900bn abroad.
Dublin has been the biggest winner based on a study which found 275 banking and finance firms have moved business abroad.
After rumours that's ended up being to be cancelled again, Tuesday’s second meaningful vote in the Commons on Theresa May’s Brexit deal will go ahead as planned confirmed Brexit Minister Robin Walker.
He told MPs the federal government will be issuing the wording of the motion and they'd be “fully informed around the government’s legal analysis” of whether Theresa May has won any concessions from other EU states around the backstop arrangements to prevent a hard border in Ireland.
With Theresa May very well to be humiliated again seeking further concessions in Strasbourg today as well as in tomorrow’s vote, it seems city institutions have been voting using their feet, moving operations abroad.
According to the Wall Street Journal today reporting the price of Brexit turmoil: “There's one certainty in Brexit: London's pre-eminent role in global finance continues to be diminished.”
In a report that says it's the “most comprehensive analysis yet of the impact of Brexit around the City and also the wider banking and finance industry,” research by thinktank New Financial found over 250 firms in banking and finance have moved or are moving business, staff, assets or legal entities from the UK towards the EU.
Worryingly, these numbers are going to increase significantly soon.
“These moves are the inevitable results of Brexit. The political uncertainty since the referendum and failure to achieve a deal has forced firms to organize for that worst and put their contingency plans into action,” says the report. A lot of the harm has already been done, it warns, adding: “this shift will chip away at London's position as the dominant financial centres in Europe.”
The report discovered that:
* Dublin is definitely the biggest beneficiary with 100 relocations, well ahead of Luxembourg (60), Paris (41), Frankfurt (40) and Amsterdam (32).
* The post-Brexit landscape is much more 'multipolar' than ever before: a lot more than 40 firms are moving staff or business to several financial centre in the EU.
* The transfer of underlying clients are higher than headlines concerning the number of staff: our conservative estimates implies that banks and investment banks are getting around lb800bn in assets; asset managers have so far transferred more than lb65bn in funds; and insurance companies have so far moved lb35bn in assets.
* There's a wide range in how different sectors have responded: for example, up to 50 % of asset managers, hedge funds and equity firms within our sample have chosen Dublin, while nearly 90% of firms moving to Frankfurt are banks or investment banks.
“Business will continue to leak from London towards the EU, with more activity being booked through local subsidiaries,” William Wright, founder and md of recent Financial told the BBC.
The report did find some good news in that the contingency plans have been drawn up between UK and EU regulators for whatever eventuality occurs when the UK leaves the EU.
But, it warns, the bad news would be that the impact of Brexit is larger than many expected, with increased job losses and losses of tax revenue and financial services with other EU countries, and potentially more to come when firms see how things pan out.
