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City of London's Brexit job losses limited to 'low thousands': new policy chief
May 4, 2017 / 4:25 PM / 5 months ago

City of London's Brexit job losses limited to 'low thousands': new policy chief

Workers walk to work during the morning rush hour in the financial district of Canary Wharf in London, Britain, January 26, 2017. REUTERS/Eddie Keogh

LONDON (Reuters) - A shift in banking jobs from Britain to continental Europe because of Brexit is likely be in the “low thousands”, the City of London’s new policy chief said on Thursday - and warned that a “turbulent” few months lay ahead.

Catherine McGuinness, 58, was elected on Thursday as the chairman of the City of London’s policy and resources committee, making her the political face of the ancient “Square Mile” financial district.

A trained financial lawyer and veteran of many financial institutions, she served as deputy chairman of the committee, she said London would remain the world’s top financial center.

This week Standard Chartered (STAN.L) and JPMorgan (JPM.N) were the latest to ensure they can continue to service its continental customers after Brexit in 2019.

“All the signals that we are seeing is that people are just making plans for the minimum necessary to ensure continuity. We are not seeing a great move in the signals,” McGuinness told Reuters.

“The signals that we are seeing would be in the low thousands. Indeed at the moment, just a couple of thousand.”

Britain’s finance minister, Philip Hammond, warned on Thursday that attempts by the EU to make a grab for the clearing of euro-denominated securities, an activity London dominates, could disrupt growth and weaken financial stability.

It was the latest in a battle of words between London and Brussels as formal “Article 50” EU divorce proceedings get underway.

“I think one would expect the next few months to be slightly turbulent as people enter into the spirit of the negotiations. For us it will be a question of carrying on with business as normal, in the background.”

McGuinness said the financial sector’s priority is to get as much access as possible to the European market, with a system of “mutual recognition” - whereby the EU and Britain accept each other’s systems of regulation - probably the best solution.

“Mutual recognition is a work in progress. There are elements within our recommendations that need further work and development.”

There is no guarantee the EU would agree to such a system, which has never been done before in financial services on the scale envisaged by the City.

McGuinness said although ensuring there is a so-called transitional arrangement to stagger Britain’s departure is a priority an announcement of any deal is likely months away because of European elections in France and Germany.

“The earlier, the better ... But I have every confidence that it is in everyone’s interest to have some sort of clarity before the Article 50 period runs out.”

Reporting by Huw Jones, editing by David Evans

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