The chairman of Lloyds Banking Group expects London to “weather” the storm of Brexit, even if there is a “no deal” conclusion to talks with the EU.
Lord Norman Blackwell predicted London will not experience a “Jenga tower” collapse and suggested that, while there will be fragmentation of financial services, no other European capital will emulate the UK capital’s success.
“I’m not complacent, but I do think London and UK financial services can weather a situation where there is ‘no deal’,” he said at the City Week event in London’s Guildhall this morning.
“It wouldn’t be optimum… but, in the months that have passed since the referendum, all the financial firms in London have been working through their contingency plans, and most have found ways that they can accommodate continuing to serve clients within the European Union.”
In January, HSBC chairman Douglas Flint described London’s ecosystem as being “like a Jenga tower – you don’t know if you pull one brick what will happen”.
Contradicting this conclusion, Blackwell said today: “Rather than the ‘Jenga tower’, I’d prefer the analogy [of the] Tower of London, something with foundations that are deep.”
“There is no single centre in Europe that is likely to emerge as being able to replace London. We’re all looking at locations to move some activities… that are most convenient to that individual institution,”
“So you’ll end up with fragmentation, which will add cost and capital. But none of those centres is likely, I suspect, to be able to move to a point where it rivals the global centre for finance of London.”