(Repeats story from Sunday)
* Multiple lobby groups launched
* Banks frustrated at lack of face time with government
* Industry asking for a long post-Brexit transition period
* Banks say two years too short to plan for Brexit
By Anjuli Davies, Andrew MacAskill and Huw Jones
LONDON, Oct 2 Large banks in Britain have
clashed with other parts of the financial sector about who
should be leading efforts to lobby the government over Brexit.
Failing to present a united front could be damaging as the
industry, Britain's largest export sector and biggest source of
tax revenue, fights to retain access to Europe's single market.
There is growing speculation that the sector, which includes
retail banks, asset managers, insurers and investment banks,
will lose rights as the British government negotiates its exit
from the European Union.
Ten of the biggest banks based in London told Reuters they
are concerned that conflicting industry voices and a burgeoning
of lobby groups will dilute government discussions.
"To the extent it looks disjointed, there is a degree of
inevitability about that as different bodies want different
things," said Gerald Walker, ING's UK CEO, and a board member of
main industry group TheCityUK.
A separate high-level group of executives, headed by Shriti
Vadera, chairman of the British arm of Spain's Banco Santander,
was set up days after the Brexit vote to represent the views of
banks, insurers, brokers and asset managers.
But last month it was subsumed into TheCityUK, after
protests from trade bodies, investment banks and smaller firms.
They felt they would be underrepresented if the government dealt
separately with larger banks in the other group, officials said.
"It was a complete dog's breakfast. There were a lot of egos
involved," said an employee of one international bank involved
in the talks. "The groups weren't connected on content or
policy. But it's now been reined in."
A spokesman for the Vadera group had no comment. TheCityUK
had no immediate comment.
Several other new lobbying groups are being set up.
SQUABBLES AND IRRITATION
There has also been disagreement between financial firms
about which organizations get to meet government ministers and
what they should prioritize in talks.
"People squabble when they don't know what to do," said one
lawyer close to the banks. "Every bank seems to feel they are
uniquely entitled to speak for the industry."
The head of one of Britain's largest banks told Reuters he
was frustrated that Prime Minister Theresa May held a meeting
with the heads of U.S. banks in New York, but had not found time
so far to collectively meet with British banks.
Similarly, international banks with a large presence in
London were irritated that they were not invited to a meeting
with the finance minister last month attended mainly by British
They then asked for their own meeting with top civil
servants from the Treasury.
"We have made it clear we are not prepared to be
intermediated," said one of the bankers involved in the meeting.
Bankers say they are frustrated that more than three months
after the referendum result they still lack a clear idea of what
Britain's divorce from the European Union means.
May provided some clarity on Sunday when she said Britain
would trigger the divorce process by the end of March, starting
two years of exit negotiations.
Bankers are talking to regulators in other European capitals
about moving parts of their business although no firm decisions
have been taken yet, executives and lawyers said.
"The government says 'we will not give a running commentary'
but as banks without more information we can't plan," said a
senior executive at a top British lender, who has held talks
with government ministers.
Banks say the two-year exit time frame is too short.
CALL FOR COHERENCE
The febrile mood in the City over Brexit rose to the surface
last month when Angela Knight, a former government minister who
headed the British Bankers' Association during the financial
crisis, called for a coherent voice to help the government in
its negotiations with Brussels.
"If the different groups keep on going either to the
government or to Europe saying 'do this' or 'do that', then all
that will happen is government and Europe will say, 'well the
Brits don't know what they want in financial services' and so
you will get what you are given," said Knight.
Another new lobbying group will be launched this month in an
attempt to embrace both those who backed and opposed leaving the
EU and to give a voice to smaller, more domestically focused
firms whose priorities differ from the big banks.
"It's right the big banks should have a significant seat at
the table. At the other end of the scale there are an awful lot
of underrepresented institutions," said Anthony Belchambers, one
of the leading members of the new Financial Services Negotiation
"We have to bridge that divide and make sure as far as
possible the financial services sector speaks with one voice."
Property investor Richard Tice has started another group
backed by prominent City figures, including Hargreaves Lansdown
founder Peter Hargreaves, pushing the government for a "hard
Brexit", or a clean break with the EU, the worst outcome for
many big American and Japanese banks in particular.
Amongst the differences, the groups all appear to share the
view that UK-based firms will not retain the passports that
allow them to sell their services across the EU after Brexit.
Banks are now focusing on asking the government to negotiate
a transitional period of up to five years between EU departure
and the start of new trading terms, once they have been agreed,
But lawyers said that such transitional arrangements have
never been negotiated before and would raise complex issues,
such as whether Britain is legally inside or outside the EU
during that period.
Viswas Raghavan, JPMorgan's head of banking for Europe, the
Middle East and Africa, said last week that his bank wants a
politically neutral body like the Bank of England or the
European Central Bank to come up with a transitional agreement
to avoid disruption to markets.
"So whatever is the new norm, we migrate to it in an orderly
fashion. If that doesn't happen and you pull down the shutters
you're going to have pandemonium," he said.
(Additional reporting by John O'Donnell in Frankfurt and
Lawrence White in London; Editing by Rachel Armstrong and Anna