However, the executives told parliament’s Treasury committee that a Brexit was unlikely to unseat the City of London as Europe’s main financial centre. They added that the precise impact of leaving the EU would depend on what terms the UK managed to negotiate regarding its future relationship with the bloc.
“The spectre of exit scenarios is quite significant,” James Chew, group head of regulatory policy and strategy at HSBC, told MPs. “It is going to be a very big disruption. But I don’t think we have sat down and said ‘it is going to cost us X billion pounds’.”
Mark Astaire, vice-chair of Barclays investment banking division, said: “I think [the UK] would continue to thrive outside the union. Do I think there is a risk that if we were to leave the union that the UK would not be the leading financial centre in Europe? I do not.”
“If the British people vote to leave, there will be a lot of work to be done,” he added. “We have got plans to make sure that if that is what happens we know who is going to do what. It will inevitably be an expensive exercise.”
With David Cameron, prime minister, planning to call a referendum on the UK’s membership of the EU as early as June, bankers are starting to focus on the issue as one of the biggest factors likely to drive London markets this year.
MPs pressed the two on whether the UK’s financial services industry was hampered by EU regulation — an argument often made by the hedge fund bosses who have donated money to the Out campaign.
While admitting some EU laws had been unwelcome — such as a cap on bankers’ bonuses and restrictions on short selling — they said Brussels had also produced positive measures, such as improvements to trade finance rules.
Both cited a risk that if the UK left the EU it could lose influence, such as in its ability to influence global financial policy making.
“One of the risks is that the UK gets sidelined,” said Mr Astaire. “I don’t think that is inevitable, but given the size of the City of London I think we do get outsized influence. It is also a benefit for Europe as a whole to have such a large financial centre in London.” [...]
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