Banks worry about losing passporting rights
July 14, 2016: With uncertainty looming large post-Brexit, some banks may shift their headquarters and offices outside London.
Andrea Orcel, president of UBS Investment bank, has warned that it is considering moving its staff to a European country, following the UK’s vote to leave the EU.
UBS, considered the world’s largest manager of private wealth, previously warned that London is likely to see an exodus of finance jobs in the wake of the Brexit vote.
“We would need to consider moving a number of our employees to a European Union country,” Orcel said recently on Bloomberg TV. “We would still deal with the UK, but the part of the business that is EU business, done from London, would need to be done from elsewhere,” he added.
Though he refrained from mentioning a number, he did say “it would be significant enough”, which would require complete reassessment of the bank’s model.
“The French government, the German government, a number of governments are making, if I may call it this way, a case for people to move to their jurisdiction. At the end of the day, they would like to import wealthy people who spend, who earn, who create jobs for their economies into their own centres,” Orcel said.
Banks in the UK fear that they may lose passporting rights, which allow firms in one EU country to provide services to clients elsewhere in the single market.
Though not many banks have come out openly and spoken about shifting their base, some believe that many banks are ‘contemplating’ shifting.