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It’s the game of a lifetime between the United Kingdom and the European Union but some of the City of London’s biggest players are sitting on the sidelines.
The financial sector, one of the key drivers of Britain’s economy, is deeply divided on how to influence voters’ decisions in the planned referendum on the U.K.’s membership of the EU. The City’s involvement, or lack of it, will be an important factor in the referendum campaign, especially at a time when polls suggest the outcome will be close and the most recent survey showed falling support for EU membership among U.K. business executives.
With a few exceptions, largely among hedge fund managers angry at Brussels’ moves to regulate the industry, most big financial companies privately agree that a “Brexit” from the EU would be bad business for them and their customers. But there is wide disagreement on what to say publicly ahead of a plebiscite that could take place as early as this summer.
On one hand, large U.S. banks such as Goldman Sachs and Citigroup have been open about the benefits of EU membership, pointing to the job losses, financial consequences and logistical hassle that would be caused by the erection of a border between Britain and the European single market.
“We have been fairly outspoken that Citi is in favor of the U.K. staying in,” Alan Houmann, head of government affairs for Citi in Europe, the Middle East and Africa, told POLITICO. “We see the value of the single market as very high indeed from both our perspective and the perspective of our clients.”
But large domestic players, such as HSBC and Lloyds, have studiously avoided taking a position, even though some of their senior people have spoken out on the subject. That’s because the referendum promised by Prime Minister David Cameron is stirring strong emotions in a country with a historically tortuous relationship with a bloc many Brits simply call “the Continent.” [...]
“The banks’ position is understandable. They just don’t want to offend their checking account customers,” said a City figure. Some banks say they are waiting to see the outcome of the deal Cameron can wrangle from his European counterparts — which could be sealed at next month’s EU summit — before taking a public stance.
Anti-banking sentiment
Both supporters and opponents of Brexit seem to agree: the big High Street banks won’t be much of a factor in the referendum. “We are not expecting the big U.K. banks to come onboard with Vote Leave. But we also don’t expect the big banks will be campaigning for staying,” said Paul Stephenson, communications director for Vote Leave, one of the two groups pushing for an Out vote. “I expect most banks will stay out of it.” [...]
That could be an uncomfortable position in a country where anti-banking sentiment among politicians and the public is still running high. Pro-Brexit campaigners are already planning to seize on any EU-friendly utterance from foreign banks. [...]