In the aftermath of Brexit, a growing number of lenders have joined the list of those considering a move out of the UK. A report in The Independent today reveals that Paris remains one of the main contenders.
According to the report, several leading international UK-based banks are said to be in the advanced stages of the development of plans to relocate their operations to Paris as London braces for the impact of Brexit – so says France’s chief financial regulator.
In fact, back in October, Finance Magnates reported how Paris La Défense, the Parisian business district, had launched a major advertising campaign across prominent locations in the City of London to lure City workers to re-locate to France post-Brexit.
Paris, as we have thus seen, is among a number of European cities seeking to woo firms considering a move away from London to maintain their access to EU markets, and faces competition from Dublin, Frankfurt and Luxembourg, amongst others.
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Benoît de Juvigny, secretary general of Autorité des Marchés Financiers (AMF), said that “large international banks” have conducted due diligence, the process of close scrutiny that large companies conduct in advance of closing a major deal, to move operations to the French capital.
He further commented: “In some cases I would say we are still at the level of inquiries or informal inquires by consultants, by lawyers and so on. But in other cases, especially regarding large international banks, it’s a normal informal inquiry but they have been undertaking due diligence, and we are receiving lots of practical questions regarding the way they are going to be managed from our perspective, from their relationship with the French regulators.”
UK banks are still concerned that a hard Brexit will result in the UK leaving Europe’s single market, signalling the loss of passporting rights which enable them to sell their services freely across the rest of the EU whilst giving European-based firms access to Britain.
Loss of Passporting Rights
The loss of these rights could be devastating to the City of London.
With as many as 5,500 firms registered in the UK which use passporting rights to operate in other countries, the loss of these rights could prove detrimental to the City of London.
Cyril Roux, the deputy governor of the Central Bank of Ireland, has confirmed that several UK-based firms have started the application process to be authorised in Ireland. Meanwhile, James Bardrick, the UK head of US bank Citi, commented that the main question that businesses had to answer was how quickly they needed to act on contingency plans aimed at protecting their businesses should the UK leave the single market.