A hard Brexit is not the significant danger facing the city of London, a financial chief has informed.
Rather, Stephen Jones, leader of the newly established mega lobby UK Finance, said Britain’s financial district should instead settle for any fallout if it loses its passporting powers.
A cliff-edge Brexit begins 2019 would most likely profess grave threats to Europe’s whole monetary system but will be dodged at all costs by the EU and Theresa May’s Assembly, according to the City of London’s top financial consortium.
Stephen Jones also noted The Daily Telegraph as saying: “A hard rupture from day one would be very disruptive on a Continental scale.
“The European banking system does not have the infrastructure capable of absorbing these activities.”
Referencing Germany’s all-influential finance minister, Mr Jones said: “Everybody realises this, and I cannot believe that either the UK or the EU would let it happen. Wolfgang Schauble’s cabinet understands it.”
Senior City figures have urged for an early settlement on a longer development period, assuring a monotonous way forward for the UK’s large financial services sector, holding banks, asset managers and insurers from making quick arrangements.
However, Brussels has driven back on the idea, with EU negotiator Michael Barnier claiming that such a settlement would only be reviewed once a “clearer picture” of the UK’s broader post-Brexit association with the EU has taken shape.
Mr Jones said: “Our working assumption is that EU regulators will be flexible from day one, but over time they will require more infrastructure to move.” Furthermore, London controls a big share of European issued debt and equity securities, besides much of the continent’s lending and risk management.
While the process of setting footholds within the eurozone in a post-Brexit world continues a mere paper exercise, it risks weakening Britain as the EU aims to build up its own hubs, before going on to require stricter demands on the city.