Financial services since leaving the EU17 Sep 2023 11:48
Financial Services Industry
Financial services companies recognised that Brexit likely would require the relocation of significant operations and personnel from London to EU locations and would mandate local registration and licensing to conduct business in the EU.
Major banks, including JPMorgan, Morgan Stanley, NatWest, Goldman Sachs, Bank of America, UBS, and Credit Suisse, moved hundreds of employees and large quantities of assets from London to other European cities before the deadline for a trade deal. London-based insurers also set up EU locations, including Lloyd’s of London in Brussels and Aviva in Ireland.
Brexit ended the passporting rights of U.K. investment houses, which permitted companies registered in one EU market to operate in others. To conduct EU business following Brexit, U.K. investment banks require equivalence rulings that recognize regulations in a company’s home country as sufficiently similar to those of the EU. European firms can use London clearinghouses until June 2025. This was extended from the original June 2022 deadline. The European Commission also agreed to consult on clearing activities in the EU.
Most core banking businesses, such as deposit-taking, retail investment services, and other lending services, are not included in the equivalence system. This means U.K. banks must establish EU offices to continue these activities with EU clients. While London will always be a major financial center, its status may be affected, especially if equivalence rulings are not forthcoming and clients turn to institutions in other countries that already have the rights and ability to operate in the EU.
Approximately £1.2 trillion ($1.6 trillion) in financial sector assets left London between the 2016 Brexit vote and the end of 2020. More than 7,500 financial sector jobs were relocated from London to other European cities.
https://www.investopedia.com/news/brexit-winners-and-losers/
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