Firms have begun shifting around €150bn (€135bn) of UK assets from the City into France ahead of the Brexit transition period deadline, according to the governor of the Bank of France.
Francois Villeroy de Galhau told the Europlace International Financial Forum that the Bank of France has authorised asset shifts by 32 companies — mostly investment firms — to “ensure continuity of activities in France”.
The governor said the bulk of the €150bn figure involved French firms “simply moving assets home” ahead of Britain’s formal exit from the bloc on 1 January.
However, he warned that a portion of the money involved UK-based entities shifting their portfolios to the continent to ensure they could continue trading in France post-Brexit.
Villeroy de Galhau added that 31 firms had registered for a licence to operate in France and currently await a decision by French market watchdog ACPR.
It comes after European leaders today warned that Britain will face tough enforcement measures to ensure it does not breach any commitments relating to a trade deal with the EU.
The bloc said it will call on chief Brexit negotiator Michel Barnier to ensure that level playing field guarantees for EU businesses competing with British firms receive Brussels’ word to take rapid retaliatory action against any breaches.
Earlier this month, Brussels said it will refuse the City access to the single market from next year unless the UK sets out plans to diverge from the EU’s financial rules.
Mairead McGuinness, Irish MEP and incoming EU financial services commissioner, said Brussels would be reluctant to grant the UK an equivalence deal “unless and until we get clear answers from the United Kingdom about their intentions to deregulate”.
Senior government officials have said the UK is “confident” it will receive an equivalence deal from the EU, which would allow Britain’s financial services to continue as usual into next year.
However, the threats from Brussels appear to have spooked companies in the City into considering alternative options.
At least 24 financial services firms have rolled out plans to make more than £1.2 trillion of asset transfers to the continent since the Brexit referendum, according to EY.
JP Morgan — the biggest US bank —is set to move €200bn (£184bn) assets from the UK to Germany as a result of Brexit, Bloomberg reported earlier this month.
It has also told its 200 London-based staff to move to Europe ahead of the transition period deadline next year.