International banks based in Britain are readying to relocate some operations outside of the country in 2017, fearing post-Brexit uncertainty, the director of a powerful banking lobby said on Sunday.
“Their hands are quivering over the relocate button,” Anthony Browne, chief executive of the British Bankers’ Association, wrote in The Observer newspaper.
He said banks were uncertain about whether they would be able to offer services across Europe once Britain leaves the EU in 2019, so were readying for all eventualities.
Britain has said it will trigger the two-year negotiations clock before leaving the EU between the New Year and the end of March.
Banks have called for transition arrangements to be put in place after Britain leaves the EU.
Browne said banks based in the UK were lending £1.1 trillion ($1.3 trillion, 1.2 trillion euros) to companies and governments in the rest of the European Union, “keeping the continent afloat financially”.
Free trade in financial services between Britain and continental Europe was worth more than £20 billion, he said.
If Brexit is bungled, that trade is at risk, “and the public and political debate is taking us in the wrong direction”, he wrote.
Browne said banking was probably more affected by Brexit than any other sector of the economy, as it is easily Britain’s biggest export industry.
“The problem comes -- as seems increasingly likely, judging by the rhetoric -- when national governments try to use the EU exit negotiations to build walls across the Channel to split Europe’s integrated financial market in two, in order to force jobs from London,” he wrote.
He said it was irrational that the EU wanted to reduce trade barriers with the United States and Canada and impose them on Britain, “their biggest trading partner”.
“Banks might hope for the best but have to plan for the worst,” he wrote.
He said most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers.
“Their hands are quivering over the relocate button. Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year.
London will survive as a global financial centre, he said, adding: “Finance is inventive and will find a way through.
“But putting up barriers to the trade in financial services across the Channel will make us all worse off, not just in the UK but in mainland Europe.”