Hammond seeks to keep UK a ‘great place’ for banks post-Brexit

Bloomberg

UK Chancellor of the Exchequer Philip Hammond said he understands the risks posed to Britain’s financial industry by the vote to leave the European Union and the importance of limiting the fallout on banks.
”It is important Britain maintains its status as a great place for financial services,” Hammond said in a statement. “The government stands ready to help the sector maximize the opportunities that leaving the EU presents.”
Hammond spoke after meeting in London on Wednesday with financiers including Douglas Flint, the chairman of HSBC Holdings Plc, Shriti Vadera, the chairman of Santander UK and Xavier Rolet of the London Stock
Exchange.
Prime Minister Theresa May is coming under pressure from some of the world’s biggest banks to strike an interim agreement with the European Union for financial companies before formal exit talks start, a process that won’t get under way before early next year.
Banks are applying pressure on the government to ensure they are not hurt in the Brexit negotiations as Prime Minister Theresa May signals that when striking a deal she will focus on controlling immigration ahead of ensuring continued access to the single market. That leaves doubts over so-called passporting, which now grants banks based in London the right to raise funds and offer services elsewhere in the EU without tariffs.

UBS Warning
Major investment banks and insurers have said they may start shifting staff and operations to elsewhere in the EU should Britain fail to win special status. UBS Group AG said Tuesday it may have to transfer as many as 1,500 jobs from London to elsewhere in Europe, while Lloyd’s of London said a day earlier it may have to move part of its business if access to the EU single market isn’t maintained.
Passporting, the ability of banks to freely sell services and products across the EU, will be a key part of negotiations between the U.K. and the bloc. Brexit Secretary David Davis said Tuesday it’s “very improbable” that Britain can stay in the single market if it means ceding control over migration, though May has spoken of her ambition to go after the “best possible deal in trade and services” after Brexit.
Securing ongoing access to the EU single market on broadly similar terms to now is absolutely vital to maintaining a vibrant U.K. financial-services sector, TheCityUK said in a briefing paper on Wednesday.
The lobby group is calling on the U.K. government to strike an interim agreement with the EU on preserving passporting rights for a transitional period after the end of two years of official Brexit negotiations.
“The industry is not asking for a bonfire of regulation and the sector should continue to be regulated in accordance with leading global standards,” TheCityUK said in the paper.