Many investment banks use their London hubs to run their EU operations, relying on the passporting system that allows them to operate across the bloc while being regulated just in Britain. The Brexit vote could threaten those arrangements if banks no longer have access to the single market.
Rob Rooney, CEO of Morgan Stanley International, commented yesterday at a conference in London:
Banks will have to start moving staff if Britain loses access to the European single market post-Brexit.
It really isn’t terribly complicated. If we are outside the EU and we don’t have what would be a stable and long term commitment to access to the single market then a lot of the things we do today in London, we’d have to do inside the EU 27.
In the days after we lose access, if that’s what happens, the jobs that go, may be somewhat significant or they may not… It will be a much more expensive model over time…We would be operating a much less efficient business model, we’d have to see how that evolves.”