LONDON — Jes Staley, CEO of Barclays, said that determining the future role of the City of London after Brexit will be long and difficult process, and warned of tough times ahead.
Speaking on a panel alongside HSBC chairman Douglas Flint at the Prosperity UK conference in London on Wednesday, Staley told an audience: “I don’t think anyone is under the illusion that this is going to be done quickly.”
“There’s going to be a great deal of uncertainty that we’re all going to have to live with for the next couple of years.”
While both Staley and Flint were upbeat on the future of the City, the pair differed in their views on the difficulty of striking a deal for financial services during Brexit talks. Flint argued that the earlier a deal could be struck, saying banks “need as early a line of sight to the deal as possible.
He added that it is “better to get a good deal in a reasonably short period of time, rather than an absolutely brilliant one” once institutions have started to move staff out of centres like London.
Staley acknowledged that it would be “terrific if we had certainty” in the short term, but said getting clarity on any Brexit deal quickly will be tough.
“If there is absolute clarity on an implementation period in reasonably short order that would be terrific … I imagine that’s going to be tough to lock down.”
To aid negotiations, Staley noted that Barclays has sent what he described as some of the bank’s “most talented people” to work within the British government to ensure that the interests of both Barclays and of the broader financial sector are best represented during talks.
Since Britain voted to leave the EU last June, the future shape of the UK’s financial services sector has been up in the air, largely thanks to uncertainty about the retention of Britain’s financial passport.
The passport is essentially an agreement that allows banks with a base in the UK to access customers and financial markets in the (currently) 28-nation EU trading bloc. It includes a system of common financial rules that all countries in the passport network sign up to.
For example, a US or Japanese bank can set up a subsidiary in London and from there operate branches on the continent. If the UK loses the passport, those branches won’t be tethered to a country in the EU single market and therefore be unable to carry out the range of services they might want to.
Britain leaving the single market virtually guarantees the loss of the passport. This has forced banks to consider their operating positions in the UK, with many planning to move staff from London to other bases in Europe. HSBC, for example, has already suggested that it will shift as many as 1,000 jobs from London to a major European city.