01 September 2016

Bloomberg: Global banks said to seek special Brexit deal to keep status quo

An interim agreement would seek to preserve passporting, the ability of banks to freely sell services and products across the EU, beyond the end of two years of official negotiations, said the people who asked not to be identified because the matter is private. The gambit may prove unrealistic because European leaders, including German Chancellor Angela Merkel, have repeatedly said they won’t engage in informal talks. [...]

‘Undesirable Decisions’

"The shorter the timeframe, the more likely it is that undesirable decisions might have to be made,” said Andrew Gray, head of Brexit for U.K. financial services at PricewaterhouseCoopers LLP. “Without a deferral of passporting rights, some firms may start applying for banking licenses, seeking regulatory approvals and securing office space elsewhere irrespective of whether Article 50 has been triggered," [...]

Deutsche Bank AG Chief Executive Officer John Cryan said this week that London will remain a top financial center over the next decade and that his bank realizes that many of its customers and trading operations are based there.

“A transitional hiatus period would create breathing space for carrying on negotiations so that a deal is struck that benefits everyone,” said Arun Srivastava, head of financial services in London at law firm Baker & McKenzie.

Lobby Push

Various finance industry lobbying groups are pushing for concessions to minimize disruption from Brexit, including TheCityUK and the Financial Services EU Taskforce, convened by Banco Santander SA’s U.K. Chairman Shriti Vadera to represent some of the biggest banks and insurers. The British Bankers’ Association is working with advisers at law firm Clifford Chance and Global Counsel, the advisory firm co-founded by former lawmaker Peter Mandelson, according to a person familiar with the matter.

Bankers say the U.K. government is also yet to finalize which of its administrative departments will have ultimate responsibility for hammering out an agreement for financial services. While lawmaker David Davis is charged with leading the Brexit talks, Chancellor of the Exchequer Philip Hammond’s Treasury is traditionally the point of contact between banks and the government.

Full article on Bloomberg

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