UK’s Financial Sector to Avert Cataclysm, Lloyds’ Blackwell Suggests

At least one man thinks that Brexit will not erode London's status as Europe's financial capital.

There is no shortage of dialogue and predictions relating to the UK’s financial services industry in the wake of a Brexit from Europe. While many lenders and individuals have publicly portended and charted headwinds and risks, Lloyds Banking Group’s Chairman Lord Blackwell has maintained a more reserved stance, shooting down any notion of a wholesale collapse of the industry.

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As the financial capital of Europe and one of the primary nexuses in the Western world, London, and in a broader sense the UK, stands to be shaken up by a potentially harsh Brexit. With the triggering of Article 50 and the rescinding of passporting rights for lenders and companies, many worry that the move could trigger an exodus of talent, jobs, and investment.

Lord Blackwell doesn’t see grounds for any “Jenga tower” collapse however, which runs counter to the opinion of another banking executive, HSBC Chairman Douglas Flint. Flint has gone on record mapping out the litany of risks seen with Brexit, which has already caused heavy job losses in the UK. Lenders such as Deutsche Bank and Standard Chartered have let employees go by the thousands with additional cuts scheduled on the horizon.

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And yet, Blackwell has taken a more calming stance, ultimately seeing no plausibility in a wholesale collapse. The opinion is shared by many, given the maturity and scale of the UK’s financial services industry. Undoubtedly, there will be some level of transition, but whether or not the industry will escape this period totally unscathed or crippled beyond repair is simply a matter of conjecture. The reality will likely be somewhere between the two.

Lord Blackwell has been pro-Brexit, explaining: “Rather than a Jenga tower, I think of a Tower of London, with deep foundations.” Reiterating the UK’s strength in this space, he cited such pillars as London’s legal system, expertise, and infrastructure.


Another outcome that has been publicly floated by lenders and exchange venues has been a more fragmented approach rather than an upheaval. Such a situation could see the outflow of talent and resources to other European capitals such as Frankfurt, Dublin, Paris, or Luxembourg, among others. However, Blackwell does not feel that any of these locales in and of themselves will be able to challenge London as the premier financial center of Europe.

The tone was also echoed recently by Euronext NV CEO Stephane Boujnah, who warned of additional costs and fragmentation of the financial industry as a result of the UK’s divide with the EU. This sentiment was one of the first vocalised by another European exchange – up until now, the spotlight has primarily been on European lenders, who have been forced to field questions on cuts, allocation of labor, and operations.

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