November 1, 2017 / 1:24 PM / 23 days ago

Barclays CEO forced to plan for Brexit without political clarity

LONDON (Reuters) - Barclays is having to put plans in place for dealing with Britain’s divorce from the European Union without clarity on how political negotiations will go, the bank’s Chief Executive Jes Staley said on Wednesday.

FILE PHOTO: Chief executive officer of Barclays, Jes Staley, takes part in the Yahoo Finance All Markets Summit in New York, U.S., February 8, 2017. REUTERS/Lucas Jackson/File Photo

The British lender said in July that it was talking to Irish regulators about extending its activities in Dublin in preparation for when Britain leaves the EU in March 2019.

Staley said the bank will relicense all of its branches in Europe so they become part of their Irish business but they are having to make these changes without clear direction from London or Brussels on what they need to do.

“Like all of us, we are in sway to the desires and wishes of the political bodies and I have no idea how that will go,” Staley said speaking at an event in Westminster, close to the British parliament.

“I think there is a clear recognition of the importance of the United Kingdom but the political reality that we all have to deal with, we will make adjustments,” the American added.

Goldman Sachs CEO Lloyd Blankfein made similar comments about the political uncertainty on Monday, when he said a lot of things were out of the bank’s control when it came to building up its new European headquarters in London.

Unless Britain negotiates new trading relations with the EU, banks, insurers and fund managers could be locked out of the bloc’s markets when it leaves.

Bank of England Deputy Governor Sam Woods said on Wednesday that job losses totalling 75,000 in banking and insurance because of Brexit were plausible.

London dominates global currency trading and is Europe’s main finance hub. Overall the sector employs more than a million people across Britain.

Some firms have started to move staff out of London, while others are waiting until early 2018 to see if Britain and the EU agree transitional arrangements to smooth Brexit.

Staley was however optimistic that London would remain at the centre of European capital markets.

“The capital markets are in London not because of Barclays, and not because of JPMorgan, not because of Goldman Sachs. They are here because the investors of free capital...are by and large located in New York and London, and we want to be near our investors,” he said.

Reporting By Anjuli Davies; Editing by Keith Weir

Our Standards:The Thomson Reuters Trust Principles.
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