First there was Brexit or No Brexit, now the key question to ask is whether there will be a hard or a soft Brexit. If the United Kingdom takes a hard stance on the movement of people and completely moves out of the European Union in any shape and form including the EEC, then the chances are that the British Banks will lose their so-called passporting rights. Banking matters to Britain Britain is the largest market for Euros outside of the common currency area. It is also a country that is dependent on its financial services industry for generating a large measure of its wealth. The UK’s Financial Times newspaper recently reported that the UK’s financial services sector has already shrunk 10 percent since the financial crisis. According to the City of London : “UK-based financial and related professional services contributed 12% of UK GDP in 2014. Nearly 2.2 million people work in the industry across the country, two thirds of whom are outside London. Our industry employs 7% of the population and the productivity of these jobs is 67% above the UK average.” Bundesbank President Sets A Cat among the Pigeons UK’s post Brexit position is still unclear. The U.K. Prime Minister Theresa May has not yet triggered Article 50 and is unlikely to do so till the end of the year. In the uncertainty of what will happen in a post Brexit Britain, banks are certainly right to fret. Banks including foreign banks in Britain can extend services to mainland Europe without hindrance due to current provisions in the European system. In case Britain can’t maintain a place in in the EEC post Brexit, this may not longer be the case and the banks may require licenses to operate in each and every country of the EU. […]
