The United Kingdom’s largest bank, HSBC, part of the global banking giant with roots in Hong Kong, will not be relocating its headquarters out of London following the result of the Brexit vote.
This is according to comments from the firm’s most senior person, HSBC Chairman, Douglas Flint, speaking at a conference today in the UK.
Earlier this year, the company said that it would keep its global headquarters in London, further endorsing the world’s leading financial hub for banks and major financial institutions.
City UK conference
Speaking at the City UK conference this Thursday, Mr. Flint explained how the result wouldn’t cause the bank to review its headquarter plans: “We said at the time we made the decision that we’d taken that into consideration and that in the event of this outcome we would not call for that to be revisited.”
Mr. Flint added how London “continues to be the most important [foreign exchange centre] in the world,” and explained, “our presence in Europe is well established; we have a very big bank in France, so we’ve got clarity as to what we’re doing in Europe and we’re pursuing that. This is the time to be reflective, not reactive.”
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In terms of London being a major hub for China’s offshore RMB currency, he said: “I think it continues, whether it pauses I don’t know, but I think it continues because this is still the foreign exchange trading capital of currencies that have nothing to do with Europe so – the major trading currency in the world today is the dollar.”
In response to questions about the effects of euro-denominated clearing moving towards the eurozone, he explained: “The market will go where the liquidity, the legal system, the expertise, the cluster is.”
In a related timely post today, Finance Magnates CEO Michael Greenberg provided a special analysis on the Brexit’s effect on the FX industry as it relates to London and Europe, and with regulatory related themes appearing most relevant.
Bank of England Governor Mark Carney is speak live now, as the first half of year ends today with the close of the second quarter. During a televised press conference, Mr. Carney explained that in August they will consider further options, as the Brexit decision is a major regime shift, and how the UK is capable of handling the change while it has a host of options available.
Although, as he hinted that Brexit would weigh on the economy, and more stimulus could be needed, his comments prompted a sell-off in the GBP/USD which fell from 1.34 to lower 1.33 levels during his talk – which is still underway – around time of publication.