LONDON (Reuters) - Banks in Britain will start shifting some operations to Continental Europe reasonably soon to avoid disrupting links with customers after Brexit, Barclays (BARC.L) Chief Executive Jes Staley said on Wednesday.
Britain has opened formal divorce talks with the European Union though it is far from clear what levels of access businesses will have to EU markets following the country’s departure, which is due in March 2019.
Staley said it would be hard to get full clarity on Britain’s new trading terms in the time banks need to guarantee links to continental customers after Britain leaves.
“You will start to see movement in a reasonably short period of time,” Staley told a conference, saying that obtaining a licence to trade on the continent and changing financial contracts to another jurisdiction takes a year to 18 months.
Quickly securing the residency status of European Union nationals in Britain was also critical, he said. Barclays has 3,000 EU nationals working in the country.
“Intellectual capital is perhaps the most important asset that London as a financial centre has,” Staley said.
He was speaking after Britain’s Brexit minister, David Davis, told the conference in London that the country’s place in the world was being reshaped.
“Securing an agreement with the EU within the two-year period about our withdrawal and the shape of our future relationship will be challenging,” Davis said.
HSBC (HSBA.L) Chairman Douglas Flint told the conference that banks were looking for clarity on whether there would be an implementation phase between Brexit and the start of new trading terms - and how long any such phase would be.
“It would be better to get a good deal in a reasonably short period of time, rather than a really excellent deal so far into the future that people will have triggered all their contingency plans,” Flint said.
In Frankfurt, a Deutsche Bank (DBKGn.DE) executive said the bank was considering whether it needs to move thousands of staff to Frankfurt from London due to Brexit.
“GET SOME SWAGGER”
Brexit has sparked jostling among continental financial centres for a slice of London’s financial business.
The InterContinental Exchange (ICE.N) has been asked by several EU members, including France, the Netherlands and Germany, whether it would move its clearing operations to mainland Europe, Chief Executive Jeff Sprecher said.
Several EU policymakers want clearing of euro denominated transactions, which is now dominated by London, to be based within the euro zone after Britain leaves the bloc.
French Finance Minister Michel Sapin told the BBC that it was an issue of sovereignty and security, saying the majority of clearing houses could not remain in London following Brexit.
Sprecher said Britain, by far the biggest financial centre in the region, had a “strong hand” for negotiating new financial services trading terms with Brussels.
“The UK should have a bit of swagger and not worry so much about the details,” he said. Michael Spencer, CEO of trading platforms company NEX, said most customers had chosen to clear in London and forcing them to shift to mainland Europe would be “deeply bad” protectionism that both fragments markets and forces continental customers to trade in a smaller, less efficient market.
“The Europeans will effectively be penalising themselves. Europe will be worse off. London will be worse off,” he said.
Additional reporting by Kylie MacLellan; editing by David Clarke