- Holland's largest bank could pull global operations from U.K.
- CEO Ralph Hamers says Britain leaving would be 'bad for EU'
ING Groep NV Chief Executive Officer Ralph Hamers said the Dutch lender would probably follow other major banks in reducing its London staffing levels if the U.K. withdrew from the European Union.
“If some of the mega banks, the markets banks, leave London, we will go with the flow,” he said in an interview with Bloomberg News. “Either the circus of the financial markets is located in London or its going to be somewhere else.”
Hamers becomes the latest senior financier to warn a so-called Brexit would threaten London’s status as a global business hub. HSBC Holdings Plc CEO Stuart Gulliver said on Monday he would probably relocate about 1,000 investment bankers to Paris if a June 23 referendum resulted in the U.K. leaving the bloc. ING, the Netherlands’ largest lender, runs global investment banking and emerging markets operations from London and has about 650 employees in the capital.
Britain quitting would be “bad news for the EU, bad news for business,” said Hamers. The U.K. capital “attracts a lot of talent, not only English talent but also international talent,” he said.
JPMorgan Chase & Co. has warned financial-services firms from banks to insurers could pull jobs out of the U.K. if Britain fails to keep so-called passporting arrangements with the EU in the event of Brexit. Under current rules, firms are able to operate from the U.K. without needing to set up a separate subsidiary within the EU.
“If that passport were to disappear, then some jobs would need to go to continental Europe,” HSBC’s Gulliver told reporters on a conference call on Monday. The bank would move jobs to France linked to operations governed by MiFID II, the European Union market rules that cover everything from derivatives trading to bond pricing. Activities such as foreign-exchange trading wouldn’t be influenced by a vote to leave the EU, he said.
“Something like foreign exchange, which is not regulated in that way, and London is absolutely the dominant center, that would not change at that point in time,” Gulliver said.
Standard Life Plc Chairman Gerry Grimstone last week called withdrawal “potentially damaging to the U.K. economy” and said that “access to the EU single market is in the best interests of our customers and clients.”
The pact struck last week by Prime Minister David Cameron under which Britain would remain in the EU, obliges the U.K.’s financial industry to abide by what the EU calls its “single rule-book” -- the common regulations for banks and credit institutions in every country. However, it gives the U.K. some flexibility, stating that lenders outside the euro area may be able to have “specific provisions,” handing Cameron the ability to claim a shield for the British financial industry.
An exodus of large financial companies in the event of a U.K. withdrawal from the EU could also damage the clustering effect of big banks working in close proximity to each other, according to Hamers.
“You have to get together for the talent, to make the markets work,” he said. “If the big guys move out we’ll have to think about it as well.”