Brexit hit to British Banks still not fully felt, UK finance ministry says

Britain’s top financial assistants said that the hit to the city of London was less severe than the prediction, from Brexit. Britain has reached the post Brexit steady state.

Katharine Braddick, head of financial services at Britain’s finance ministry told an event held by the Peterson Institute for International Economics that banks settling on locations for their European operations. She also added that there is still a lot in play and there is quite a lot of pressure to move quite a lot quite quickly. And that is very much at the sharp end of where we are seeing the new border arise.

Banks in London face pressure from the European Central Bank to relocate staff and activities to the EU. Euro share and swaps trading has moved from London to Amsterdam, and Brussels wants clearing to follow. Braddick said that the clients themselves decide where businesses locate, and that’s certainly been the case so far on clearing and we will see that in investment banking.

The finance ministry has to set out a clear, long-term plan for the City and speed up proposed reforms, said the bankers to the report. The need to re-establish a sense of clear and consistent values and direction in financial services policy and regulation, was keenly aware by the financial ministry said Braddick. The industries see this Brexit experience as threatening predictability in business decision-making.

Douglas Rediker, founder of consultancy International Capital Strategies, said that they saw the vast majority of EU equity trading move from London to Amsterdam. It did poke a big hole in the story that London could never be replaced.