London will remain Europe’s financial centre, say bankers

The majority of British bankers believe London will still be the financial capital of Europe in five years’ time, according to a new study.

Research from IT firm Synechron found that despite the economic uncertainty created by Britain’s decision to leave the EU, 72% of bankers here are confident of the capital’s position as a financial centre.

Examining the the short- and long-term impact of Brexit, the study – conducted in partnership with research and consulting firm The TABB Group – suggested that many believe its implications will not be as significant in the long term.

But the British Bankers’ Association warned recently that large and small banks are considering their options overseas.

In June, US-headquartered financial services firm Morgan Stanley was forced to deny rumours that it planned to move thousands of London jobs to Dublin and Frankfurt.

Synechron MD Tim Cuddeford said: “Banks are no longer waiting for the Government to trigger Article 50 and have begun setting up Steering Committees to plan for life outside the European Union, with some already considering relocating staff to other cities around Europe.

“Whilst Brexit poses an unforeseen challenge for financial institutions, the prospect of rising compliance and huge relocation costs appear inevitable.”

He added: “Despite this uncertainty, we’ve found that the majority of British bankers believe that London will remain the financial centre of Europe, painting a very hopeful picture of the future.”

Synechron’s research also discovered that more than half (55%) of British banks have created ‘Brexit Steering Committees’ to prepare for the potential of life outside the EU.

Further, 56% of senior British capital markets executives believe compliance costs will rise due to Brexit. No executives said they expect regulatory costs to fall, despite a popular view in the run-up to the vote that leaving the EU would slash red tape for financial firms.

Over three-quarters (78%) said they think Brexit will negatively impact the UK’s financial markets, and 82% believe the EU will also be negatively affected.

Synechron’s survey took in the views of 80 financial services executives working in capital markets for UK-based banks.