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International banks readying to leave Britain after Brexit decision

Free trade between Britain and Europe is worth more than ?20 billion. Photograph: (Getty)

WION New Delhi, India Oct 23, 2016, 04.45 PM (IST)

International banks based in Britain are preparing to relocate some operations out of Britain following the country's decision to exit the European Union.  They have also called for transition arrangements to be put in place after Britain leaves the EU.

Anthony Browne, chief executive of the British Bankers' Association, wrote in The Observer newspaper, "Their hands are quivering over the relocate button."  He said that banks based out of UK were lending £1.1 trillion to companies and governments in the rest of the European Union, "keeping the continent afloat financially".

He also wrote that trade would be impacted if Brexit did not proceed smoothly since free trade in financial services between Britain and Europe was worth more than £20 billion. "The public and political debate is taking us in the wrong direction," Browne wrote.

He also added that Brexit would impact the banking sector the most other since it formed one of Britain's biggest export industries and that it was preparing for all eventualities in the face of operational uncertainity across Europe once Brexit happened in 2019. 

"Their hands are quivering over the relocate button. Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year. But putting up barriers to the trade in financial services across the Channel will make us all worse off, not just in the UK but in mainland Europe."

"The problem comes --- as seems increasingly likely, judging by the rhetoric --- when national governments try to use the EU exit negotiations to build walls across the Channel to split Europe's integrated financial market in two, in order to force jobs from London," he wrote.

He said it was irrational that the EU wanted to reduce trade barriers with the United States and Canada and impose them on Britain, "their biggest trading partner".

"Banks might hope for the best but have to plan for the worst," he wrote, revealing that most international banks would now have project teams in place for determining which operations needed to be moved out to ensure continuity in serving customers.

Browne was optimistic, however, that London would survive as a global financial centre. "Finance is inventive and will find a way through," he said.

Britain has said it will start negotiations with the EU about its exit between the New Year and the end of March, AFP reported.

(WION with inputs from AFP)

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