EU snatches nearly £1TRILLION in UK business – ’BREXODUS’ fears growing
Think tank New Financial has identified more than 275 firms in the banking and finance industry that have moved or plan to shift their business, staff, assets or legal entities into other European countries. From this, around £800billion has been moved by banks – nearly 10 percent of the UK banking system; £65billion have been relocated by asset managers; and the same amount also shifted by insurance companies. Ireland has been the biggest beneficiary from this seismic move, with 100 firms relocating to Dublin, with Luxembourg (60), Paris (41), Frankfurt (40) and Amsterdam (32) following.
The research also found more than 40 companies are expanding into other European cities in addition to where they have chose as their post-Brexit hub.
The think tank said political uncertainty since the EU referendum in June 2016 has forced businesses to prepare for a no-deal Brexit with no transition period.
William Wright, managing director of New Financial and one of the report’s authors, said: “This is not Project Fear; this has already happened.
“It has been apparent to everyone in the City ever since the referendum that they needed to prepare for a hard Brexit. They’ve done so.”
He added: “The top line figure almost certainly understates the extent of the Brexodus.
“We are only looking at companies that have said publicly what they are doing or have set up a new entity in the last 18 months.
“There are likely to be lots companies that already had operations in other EU countries and will have moved assets or parts of their business under the radar.”
High profile banks to publicly state they will be moving assets include Barclays, which was granted permission from a high court to shift £164billion from the UK to a unit based in Dublin.
As a result, the bank has vowed to double its staff numbers in the Irish capital from 150 to 300.
Bank of America Merrill Lynch is also moving $50billion of assets to Dublin, as well as opening a trading business in Paris with 500 staff.
Rival US investment banks, including Goldman Sachs, Morgan Stanley and Citigroup, have opened trading operations in Frankfurt.
Mr Wright believes assets will continue to move out of the UK, and warned:
“This is phase one.
“The European authorities have, up to this point, made things as easy as possible for the companies looking to set up operations in the EU.
“But over time it is inevitable that they will require financial institutions to staff-up their EU hubs.
“That will mean more business, more assets and more jobs moving from the UK.”
Currently, no deal has been agreed around the terms of the UK’s access to the EU market following Brexit.
The European Union could favour granting “equivalence”, where the European Commission decides whether a third country’s regulatory regime is the same was its own.
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