U.K. politicians are fighting to get a deal early next year that will ease businesses’ panic about Brexit. For some industries, it’s probably too late.
Bloomberg News reports that barring some major breakthrough, global banks will implement their relocation plans early next year to guarantee they’re able to have new offices inside the European Union running by the time the U.K. exits, people with knowledge of the matter said. There’s little Prime Minister Theresa May can do to stop lenders from executing their contingency plans, if they haven’t already, said one of the people.
“If there is no precise direction at the beginning of next year, I would say that the banking industry players would have to take decisions, early decisions in the worst-case scenario," Societe Generale Deputy Chief Executive Officer Severin Cabannes said earlier this month, adding that the bank intends to create 300 new roles in Paris. We would need “about one year to make that transformation movement.”
With Brexit talks deadlocked for months, firms including Goldman Sachs Group Inc., Morgan Stanley, UBS and Royal Bank of Scotland will start moving people, infrastructure and capital into their new trading hubs inside the bloc in the first quarter, said the people, who declined to be identified as the plans are not public. While banks would like to delay or ideally avoid implementing their contingency arrangements - likely to cost more than $500 million per firm - they need at least 12 months to establish full-scale operations inside the EU staffed by significant numbers of senior employees.
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