The large international banks established in London’s financial center told US business minister Wilbur Ross that due to the tensions in negotiations on the conditions of termination of UK membership and the unstable situation of the UK government, they may be forced to resume thousands of London jobs in the near future.
Wilbur Ross has been discussing with the British government and the business sector in London in recent days. According to a well-informed report from Financial Times, London, Financial Times reported that Ross closed the doors behind the largest banks in the city, including JP Morgan Chase, Goldman Sachs and HSBC, who told him they were particularly worried about security whether the British Government is in a position to reach an agreement with the European Union on the transitional period envisaged after the end of the British EU membership.
Prime Minister Theresa May presented the plan for the transition period in Florence’s speech on the British government plans for the post-Brex post at the end of last month. According to this justification, the United Kingdom, the European Union and the EU Member States will not be in a position to smoothly integrate many of the elements of a new system of relations in the expected time of expiry of the British EU membership and in March 2019, relations will also need to be ratified.
May has been taxing for two years the time needed to introduce the new rules.
However, since the United Kingdom has not yet heard details of where the negotiations on the transitional period with the EU are going to take place.
According to the insider’s sources quoted by the Financial Times, representatives of large banks told the London meeting with the US Secretary of Commerce: they have less clear information on what will be the agreement on the terms of British exit.
According to the sources of the British newspaper, “those who were informed about the meeting,” the heads of financial institutions told Wilbur Ross that in this situation “is approaching fast” the time when they have to start moving jobs, capital and infrastructure from London elsewhere, so that the resettlement can be completed until the end of the UK membership.
London’s financial analysts have also drawn attention to the risks arising from the Brexit process to London City’s financial center, in particular that the UK government plans to leave Britain at the same time as EU membership ceases to be a unified internal European Union as well. Some analysts say this threatens london banks to lose their service license in the euro area.
The most comprehensive study of this potential impact was compiled by Oliver Wyman Global Corporate Advisory Company.
According to the house model’s calculations, when worst scenarios are implemented, the city’s business activity, which is tied to the EU market, will fall by 40-50 percent, with an outstandard effect of 38 billion pounds (almost 14,000 billion forints) in revenue loss and 75,000 jobs in the City.
According to a study by another analyst at Center for London, if London’s financial center loses its access to the European Union’s single market, it can lead to the disappearance of up to 70,000 city financial services jobs. According to the company, this would be a “catastrophe” as the value of exports of financial and other related services to London reaches 100 billion pounds (more than 350,000 billion forints), and 50 percent of London’s exports.
Currently, financial service companies resident in City currently employ 350,000 indirectly more than twice as many employees.
Source: MTI / Image: hu.euronews.com /