Leading international banks based in Britain are planning to shift some operations from London to Paris following the Brexit vote, in order to maintain access to the European Union financial markets, France’s senior financial regulator says.
Benoît de Juvigny, the secretary general of the French stock market regulator, AMF, said the banks have conducted research aimed at moving their operations to the French capital.
“Large international banks… have already undertaken real due diligence and we have received a lot of practical questions regarding the way they are going to be managed from our perspective, with their relationship with the French regulators,” Benoit de Juvigny, secretary general at the AMF, told BBC television Wednesday.
“In some cases I would say we are still at the level of inquiries or informal inquires by consultants, by lawyers and so on,” de Juvigny said.
European financial centers said to be competing with London include Paris, Amsterdam, Dublin, Luxembourg and Frankfurt.
Banks are concerned that the UK’s exit from the EU may result in leaving Europe’s single market that would make it difficult for them to sell their services throughout the continent.
EU “passporting” rights currently allow financial products approved by a single regulator in a member state to be sold in the entire EU, but firms registered in the UK risk losing this right when Britain leaves the bloc.
The loss of these rights could be devastating to the City of London as nearly 5,500 firms registered in the UK use passporting rights to operate in other countries. “The result of this is that the City as a whole will be diminished,” said Anastasia Nesvetailova, economics professor at City University London.
Britain’s economy will grow more slowly over the next few years than was forecast as a result of the country’s vote to leave the EU, UK finance minister Philip Hammond said last month during an annual fall statement to Parliament.
The UK workforce faces the worst period for wages in at least 70 years because a Brexit will significantly lower real income and living standards, according to a report by the Institute for Fiscal Studies (IFS).