THE BOSS of the UK's largest lender warned banks and their clients will have to swallow higher costs if the European financial market fragments after Brexit.
Speaking yesterday at the Financial Times's Global Banking
Summit, Noel Quinn, chief executive of HSBC, said there is a real "risk of fragmentation increasing costs" in the banking sector.
Several global banks who have historically had a strong presence in London are planning on shifting their workforce to European cities to avoid being stung by greater friction stemming from Brexit.
HSBC is planning on moving about 1,000 investment bankers from London to its Paris office.
The European Central Bank (ECB) has been pushing banks to move staff out of London and into Europe.
The stronger line has been triggered by the ECB tightening rules on moving staff and capital to the EU. During the pandemic, Brussels took a more relaxed position on allowing banks to flow into the bloc.
"I'm hopeful the temporary arrangements will become more permanent. I think there is some optimism on that, but we'll have to wait and see," Quinn added.
"That's not for me to make a judgment call on, that's for politicians and regulators ... But either way, we are positioned."
London and Brussels have yet to reach a post-Brexit agreement on financial services rules.
(c) 2021 City A.M., source Newspaper