US banks plan ahead for UK exit from EU
Wall Street banks are drawing up preliminary plans to move some London-based activities to Ireland to address concerns that the UK is drifting apart from the EU.
People familiar with Bank of America, Citigroup and Morgan Stanley told the Financial Times that they considered Ireland a favourable location for some of their European business if they needed to move them out of the UK.
Most US and Asian banks have chosen to base their main European operations in the UK, giving them an automatic passport to carry out their services across all 28 countries in the EU.
But senior US banking executives said the UK was unlikely to be granted the same “passporting” rights if it left the EU – the so-called “Brexit” scenario.
David Cameron is under pressure from all sides and faces a delicate balancing act in attempting to renegotiate an acceptable UK membership settlement with the EU.
Britain is already challenging an ECB policy in the European Court of Justice that would force clearing houses handling euro-denominated transactions to decamp from London to the eurozone.
Most observers assume that if the UK did leave the EU then Frankfurt or Paris would be the most likely alternative for US banks looking to shift parts of their European activities out of the UK.
Foreign banks in London warned about the possible consequences of departure in a submission to the Treasury published last month.
The Association of Foreign Banks, whose members include BofA, Société Générale and Sumitomo Mitsui Trust Bank, said Britain should stay in the union given the volume of its business with the rest of the EU and the importance of influencing its rules.
Source: FT
