BIRMINGHAM, England (Reuters) - The UK head of U.S. bank Citi said on Monday that jobs in London’s financial sector would move to countries inside the European Union after Britain leaves the bloc, regardless of what deal is struck on access to the EU financial services market.
On Sunday, British Prime Minister Theresa May said she would trigger the process to leave the EU by the end of March, the first indication of when negotiations might start.
The future of London as Europe’s financial centre will be a major negotiating point in the talks, with banks keen to retain the “passporting” rights which allow them to sell financial services across the EU from London.
James Bardrick, UK Country Officer for Citi, which has 9,000 UK employees, said that even if Britain is able to negotiate such rights, banks were likely to reassess London operations.
“They may, for reasons of risk management, and having been reminded that things can and do change, may want to have a more balanced model,” he told delegates at an event at the ruling Conservative Party’s annual conference.
“It’s unlikely you that would see such a high concentration in UK to serve the whole of a region when the UK is not part of that economic region.”
Nearly 2.2 million people work in financial services in Britain and the sector contributed 190 billion pounds ($240 billion), or 11.8 percent of output, to the UK economy in 2014.
“If you don’t have full access to the single market then there are things you just cannot do from London under EU rules, which would remain in the other EU 27 countries,” he said.
Earlier on Monday, the Irish central bank’s director of policy and risk, Gerry Cross, said in a speech that the authorisation process for financial services firms wanting to set up in Ireland following Brexit, cannot be short circuited.
Editing by Louise Ireland