Financial services experts are warning that the possibility of Britain leaving the European Union is already causing "significant uncertainty" for the City.
In a new report out today, Bovill, a specialist financial services regulatory consultancy, said that because the specific implications of the UK leaving the EU "remain unclear", many firms are "finding it difficult to know where to start when it comes to contingency planning".
In the report, Bovill raises questions about UK financial services firms' ability to access EU investors following a Brexit, as well as how funds would be distributed cross borders. Bovill also points out that an independent Britain would need to draft new regulatory laws – which could actually lead to a "lighter touch" approach than the existing EU regulations.
"Financial services firms are surrounded by a complex web of domestic and European policy, which cannot be dismantled or amended overnight," said Bovill head of banking, investments and lending Mark Spiers. "In the event of Brexit, the UK would need to decide which existing financial services laws to keep, which to remove and whether to implement new legislation.
"If Brexit were to happen there would likely be a short term dislocation in the markets and a two-year initial period of uncertainty as the boundaries of the UK’s relationship with Europe and other countries were decided," Spiers added.