LONDON Dec 12 A deal to bridge the gap between
Brexit and the introduction of Britain's new trading terms with
the European Union could shield financial firms from any abrupt
changes and ultimately keep them based in the UK, a senior
Banks in Britain have said their fingers are "hovering over
the relocate button" because they still don't have a clear idea
of what life after leaving the EU will look like.
Financial services is Britain's biggest economic sector,
raising more than 60 billion pounds in total taxes annually and
banks want arrangements to tide the sector over until new,
permanent trading terms are agreed, which could take many years.
Prime Minister Theresa May has said she will begin formal
divorce talks with the EU by the end of March.
"Many firms are understandably concerned that in April 2019,
the Government's current timetable for leaving the EU, they will
be faced with a sudden change in their operating environment,"
Andrew Tyrie, chairman of parliament's Treasury Select
Committee, said on Monday.
"Transitional arrangements could offer firms some
Tyrie, who had backed remaining in the EU, said the
committee was asking banks, regulators, trade bodies and experts
questions such as whether transitional arrangements were needed
and, if so, how should be they designed and negotiated,
"Without an early commitment to them, firms may conclude
that they cannot afford to wait, and act pre-emptively to
protect their shareholders' interests," Tyrie said.
"This action could include some cancellation of investment
and/or relocation out of the UK, to the detriment of the British
economy, and important parts of the financial services
A document drawn up by lawyers for banks said that large
lenders in Britain want the UK government to allow their
industry to remain subject to EU law for up to five years after
Banks have said it was also in Europe's economic interests
to have transitional arrangements, but hardline backers of
Brexit fear such a deal would mean Britain not leaving the EU
for many years in practice.
(Editing by Alexander Smith)