Banks seriously looking to leave London

France's economic activity down 33 per cent Credit. Shutterstock

NOW that Britain is due to sever its direct links with the European Union and it looks as if London could be excluded from the euro passporting system, various banks have started looking for a safe bolthole within the EU from which to run their ‘wholesale’ businesses and Benoit de Juvigny a French financial regulator has indicated that many international banks are looking to Paris as an option.

According to the BBC, there are already positive noises being made by eight EU capitals encouraging banks to move their business to Amsterdam, Bratislava, Dublin, Frankfurt, Luxembourg, Madrid, Paris or Valletta and in some cases at least, international banks have already started to undertake due diligence research in order to ensure that they would be able to operate subsidiaries from their chosen city.

It is obvious that once Britain does leave the Union, it will find competition hard in many areas and the retention of business such as in the banking sector could become an expensive operation.

What is also worrying is that despite all that has gone wrong with banks in the past and the fact that members of the Union are in theory supposed to work together, it is more than speculation that at least one of those scrabbling for the new business may be prepared to relax legislation and control in order to attract international banks which could result in another financial disaster in the medium term.

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