If the negotiations over the UK leaving the EU result in a ‘hard’ Brexit this will fragment the European wholesale banking market and make it significantly less profitable.
If U.K. firms lose easy access to Europe’s $19 trillion economy, which seems likely under the terms laid out by Prime Minister Theresa May, Britain becomes a far less attractive place to do business.
The extra money is equivalent to 15 percent to 30 percent of the capital that wholesale banks currently commit to the region.
If one were to believe the headlines, every recent election would represent a political crossroads – but the reality is less black and white.
Executives increasingly assume Britain’s withdrawal from the EU will cost banks with operations in London so-called passporting rights, which enable them to provide services across the bloc.
Luxembourg is becoming a serious contender among nations bidding for business to come their way after the U.K.’s exit from the European Union.
As well as the prestige of hosting an influential EU body, countries see the benefit to their domestic markets if hundreds of experts are located there.
Paris currently has about 150,000 finance industry employees, including back-office staff, and could lure 20,000 workers or more from Britain after Brexit.
The U.K.’s impending departure from the EU means the rest of the bloc is saying goodbye not only to its most awkward member, but also to one of its richest countries.
Emmanuel Macron is likely to bring a negotiating stance widely shared by his country’s governing class: The U.K. cannot expect special favors as it seeks to extract itself from the European Union.