Brexit Britain’s ‘platinum age’! City champion rejects Remainer NatWest chief’s pessimism
Brexit: Sunak outlines UK financial services sector plan
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Professor Daniel Hodson, chairman of the City campaign group the CityUnited Project, was speaking hours after Howard Davies, the bank’s chairman, suggested the “golden age” of London being Europe’s financial capital was coming to an end in the wake of quitting the bloc. Mr Davies was commenting after banks including Morgan Stanley and JP Morgan confirmed they had relocated jobs to the continent – albeit in significantly lower numbers than initially predicted by doommongers after the 2016 referendum.
However, Prof Hodson moved swiftly to dismiss his concerns for the future.
The leader of the new Aurora Initiative for a Central Bank Digital Currency – nicknamed Britcoin by among others Chancellor Rishi Sunak – told Express.co.uk: “The golden age for the City will be surpassed by the new platinum age that is now coming.
“The important decision making and the value added part of transactions remain firmly rooted in London.”
Prof Hudson added: “The business moved to the Continent was predictable and expected.
“The City now has the independence and momentum to build on its global regulatory and FinTech leadership, its deep and diverse multi-currency markets and its Common Law heritage.
“The CUP’s Aurora Central Bank Digital Currency initiative could be an early glittering prize to be seized.”
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The City has been largely cut off from the EU since Britain’s full departure on December 31, 2020, with bankers and City officials not expecting any direct access to the bloc anytime soon.
In a column for Project Syndicate on Tuesday, Mr Davies said: “Almost five years after the Brexit referendum, and five months after Britain’s exit from the European Union, the future of London as a global financial centre seems secure.
“But although the City will remain Europe’s largest financial marketplace, its Golden Age as Europe’s financial capital is over.”
Brexit: Michel Barnier sends UK financial services warning
The debate about the future of the City so far has remained a “dialogue of the deaf” as backers of Brexit say the hit would be minimal, while opponents of leaving the EU forecast “gloom and doom”, said Mr Davies, a former Deputy Governor of the Bank of England and Chairman of the UK Financial Services Authority.
COVID-19 has confused the picture, making it harder for staff to relocate from London to the EU, he said.
Trading in euro shares and swaps shifted from London to the continent, but it will take time for any putative rival in the EU to develop a plausible matching offer, he explained.
Bankers want Britain to focus on making the City more attractive for global investors and Brussels is scrutinising Britain to see how far it will go in diverging from EU rules.
David Frost, the UK minister in charge with ties with the EU, said yesterday it was important for Britain to use its freedom from the bloc to de-regulate in the most productive way possible.
He told MPs: “We are looking at financial services regulations and seeing what we can do now we are able to move on from EU arrangements in financial services.”
The Minister for European Affairs is setting up a new unit to start a “journey that will bring huge benefits”, he said.
NatWest has slashed back its overseas operations since its balance sheet ballooned to bigger than the size of the UK economy before requiring a government bailout in 2008 during the financial crisis.
However, its minnow investment bank NatWest Markets retains a presence in the eurozone in Amsterdam, which the bank bulked up ahead of Brexit.
Earlier this month, EY’s Brexit tracker estimated roughly 7,500 jobs and £1.2trillion in assets have left the City since the UK voted to quit the EU in 2016.
However, the figure is significantly lower than wild projections in the aftermath of the referendum result, including by Xavier Rolet, former chief executive of the London Stock Exchange, who claimed more than 230,000 jobs could be lost.
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