Monday, March 11, 2019
Following the money
As the Brexit saga continues unresolved and apparently unsolvable, people's minds are starting to think through the consequences of the chaos and incompetence that this government has brought to their project.
We have already seen the way that the car manufacturing industry is being devastated by the uncertainty around our leaving the EU, and even more damage to our economy is being posed by the financial sector. The Telegraph reports that banks, asset managers and insurers have already moved nearly £1 trillion of assets out of the UK and to other European countries ahead of Brexit, with more likely to be shifted in coming months, according to new research.
They say that New Financial, a think tank, has identified more than 275 firms that have moved or are moving some of their business, staff, assets or legal entities from the UK to the EU in preparation for Brexit. Of the assets that have already been shifted, around £800bn have been moved by banks and investment banks; £65bn in funds have been relocated by asset managers; and £65bn in assets have been shifted by insurance companies.
And these figures only account for those companies that have been open about the moving of assets. A lot more money may well have been moved abroad under the radar. The paper adds that Dublin is by far the biggest beneficiary on the moves, with 100 firms relocating to the Irish capital, followed by Luxembourg with 60, Paris with 41, Frankfurt with 40 and Amsterdam with 32. More than 40 firms are moving staff or business to more than one EU financial centre:
New Financial said that the political uncertainty since the referendum has forced firms to assume the worst-case scenario of a “no deal” Brexit with no transition period, and plan accordingly. Outside of the single market, UK-based banks will not be allowed to provide some of their services to EU-based clients.
As yet, no agreement has been reached on the UK’s access to the EU market. It is understood that EU regulators favour granting “equivalence” - a process by which the European Commission decides whether a third country’s regulatory regime is equivalent to its own. However, the Chancellor Philip Hammond has said that this is not adequate for the City’s needs: “The EU regime is unilateral and access can be withdrawn with little-to-no notice.”
New Financial believes that more assets will move over time. “This is phase one,” says Mr Wright. “The European authorities have, up to this point, made things as easy as possible for the companies looking to set up operations in the EU. But over time it is inevitable that they will require financial institutions to staff-up their EU hubs. And that will mean more business, more assets and more jobs moving from the UK.”
Deal or no deal, this trend looks like it could cripple the UK economy in the short to medium term.
We have already seen the way that the car manufacturing industry is being devastated by the uncertainty around our leaving the EU, and even more damage to our economy is being posed by the financial sector. The Telegraph reports that banks, asset managers and insurers have already moved nearly £1 trillion of assets out of the UK and to other European countries ahead of Brexit, with more likely to be shifted in coming months, according to new research.
They say that New Financial, a think tank, has identified more than 275 firms that have moved or are moving some of their business, staff, assets or legal entities from the UK to the EU in preparation for Brexit. Of the assets that have already been shifted, around £800bn have been moved by banks and investment banks; £65bn in funds have been relocated by asset managers; and £65bn in assets have been shifted by insurance companies.
And these figures only account for those companies that have been open about the moving of assets. A lot more money may well have been moved abroad under the radar. The paper adds that Dublin is by far the biggest beneficiary on the moves, with 100 firms relocating to the Irish capital, followed by Luxembourg with 60, Paris with 41, Frankfurt with 40 and Amsterdam with 32. More than 40 firms are moving staff or business to more than one EU financial centre:
New Financial said that the political uncertainty since the referendum has forced firms to assume the worst-case scenario of a “no deal” Brexit with no transition period, and plan accordingly. Outside of the single market, UK-based banks will not be allowed to provide some of their services to EU-based clients.
As yet, no agreement has been reached on the UK’s access to the EU market. It is understood that EU regulators favour granting “equivalence” - a process by which the European Commission decides whether a third country’s regulatory regime is equivalent to its own. However, the Chancellor Philip Hammond has said that this is not adequate for the City’s needs: “The EU regime is unilateral and access can be withdrawn with little-to-no notice.”
New Financial believes that more assets will move over time. “This is phase one,” says Mr Wright. “The European authorities have, up to this point, made things as easy as possible for the companies looking to set up operations in the EU. But over time it is inevitable that they will require financial institutions to staff-up their EU hubs. And that will mean more business, more assets and more jobs moving from the UK.”
Deal or no deal, this trend looks like it could cripple the UK economy in the short to medium term.
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and ,of course,you have ERG and Mogg financiers setting up abroad and taking their money with them. They wil not loose out but the rest of us will!
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