To a huddle of European journalists, Jens Weidmann, president of the Bundesbank, claimed that Frankfurt could be attractive and would welcome newcomers. This is of course just the latest marketing attempt by our competing continental financial centres wanting take some of the City’s business. But how does the City respond?
We are of course used to competition and welcome it, as there are many reasons why London is the world’s leading financial centre, from stable rule of law, well developed infrastructure, to world-class universities and employees. Dublin, Paris, Frankfurt and Luxembourg all have their merits, but size is the big issue, with the UK’s financial and professional services sector dwarfing any of its continental rivals. Even Weidmann admitted he does not expect a mass exodus from London to Frankfurt.
It is possible that any business which is lost to London may well move further afield to the likes of New York, Hong Kong and Singapore for operations which aren’t EU related, which would be a detriment to the European continent as a whole.
To maintain London’s position, what is the City looking for in the upcoming Brexit negotiations? We strongly support the five-point plan advocated by the TheCityUK, the body that represents UK-based financial and related professional services.
1) Deliver clarity and stability to the best extent possible. The exit process must be orderly to ensure financial stability with a clear view of the framework for the UK’s future relationship with the EU and the global economy.
2) Defend the UK’s pre-eminent position in financial and related professional services. These are times of growing global competition, and the UK must work hard to retain and enhance existing business flows and secure future business opportunities.
3) Map out an exit from the EU which maintains access to key markets while safeguarding future relations. The UK needs to secure Single Market access on terms that resemble as closely as possible the access we currently enjoy, including through a bespoke British option for passporting.
4) Move swiftly to advance trade and investment opportunities with the rest of the world – both in developed and developing economies. The UK can only do this by bolstering its already strong links with the US and Japan, redoubling efforts in key emerging markets such as China and India, as well as identifying valuable opportunities in others.
5) Develop an even deeper partnership between government, regulators and business. This will attract more foreign direct investment and sustain the industry’s exports.
The most important thing to remember when entering into negotiations on anything from business deals to buying a home is what you are negotiating for, and what you are looking to achieve. The upcoming Brexit talks between the UK and EU will be extremely complex, as they involve unravelling decades of treaties and regulations, but are of vital importance to our country. It is our task as a voice for industry to ensure that the government fully understands and appreciates the implications for the financial and professional services sector of every decision that it takes when the ball gets rolling next year.