LONDON (Reuters) - The City of London Corporation, which runs the only global financial centre to rival New York, has formally backed Britain’s membership of the European Union in a June 23 referendum.
Many financiers say a British exit would sap London of its wealth, hammer sterling, undermine the world’s fifth largest economy and prompt some traders to move their business to other financial centres such as New York and Singapore.
But the City of London had until now steered clear of formally backing Prime Minister David Cameron’s bid to approve membership as some senior financiers in London supported a British exit, known as a ‘Brexit’.
“The City of London Corporation cannot afford to remain quiet on the biggest issue facing the UK,” said Mark Boleat, who is effectively the political leader of the historic financial district’s municipal body.
“When City firms of all sizes and in different sectors, who we represent, are voicing their concerns about the risks of leaving the EU, we need to make sure the City of London Corporation remains relevant to our stakeholders,” Boleat said.
London dominates the $5.3-trillion-a-day (£3.7 trillion-a-day) global foreign exchange market and is by far the most important financial centre in the European Union, vying with New York for the title of the world’s financial capital.
While the popular press has cast bankers as the villains behind the 2008 financial crisis, the financial services sector makes up at least a tenth of Britain’s $2.9 trillion gross domestic product.
Goldman Sachs and JPMorgan have made large donations to the campaign to keep Britain inside the European Union. Opponents of membership have dismissed as scare stories warnings that London would lose business to rivals.
They say Britain and London would thrive if cut loose from what they say is a doomed experiment in German-dominated unity and excessive debt-funded welfare spending.
But with the formal support of the City of London, Cameron now has the backing of many international companies including BP, big trade unions, the opposition Labour Party, Scottish nationalists, big banks and allies such as the United States.
Polls suggest about a fifth of voters are undecided though betting odds indicate Britain will stay in the world’s biggest trading bloc.
A British exit from the EU would rock the union - already shaken by differences over migration and the future of the euro zone - by ripping away its second-largest economy and one of its top two military powers.
Pro-Europeans, including former Prime Ministers Tony Blair and John Major, have warned that an exit could also trigger the break-up of the United Kingdom by prompting another Scottish independence vote.
Editing by Dominic Evans