What Brexit means for the banksTuesday, November 6, 2018
The UK financial sector leads the European financial industry. As Brexit approaches, there is uncertainty in how the financial services of our country will cope. So what does Brexit mean for the UK banking system?
Bloomberg’s Silla Brush reported that the deal negotiated by the PM Teresa May is in line with what the banks were expecting since the start of the Brexit negotiations, as the terms are similar to the trading deals for countries like the US and Japan.
In comparison to the pre-Brexit UK market, the UK financial institutes seem to be worse off outside the EU. The system proposed based on equivalence means that banks and other financial businesses might have to create subsidiaries within the EU and move jobs, capital and client relationships from the UK to mainland Europe. Financial employees, especially the ones who live in London, might have to relocate and leave families behind for a year or two. This only means that funding two homes in conjunction with an increase in tax and a falling pound can make things expensive for the-not-distant future.
John McFarlane, chairman of the financial services advocacy group TheCityUK and chairman of Barclays, stated that securing a Brexit implementation period can ensure financial stability whilst enabling businesses to deal with Brexit more effectively. Barclays is planning to expand its Dublin office by 150 to 200 staff, including new hires and UK job moves. The latest move to Europe came from the insurance institution Lloyd’s of London, officially opening its first European hub in Brussels at the start of November. Citigroup has plans to relocate staff from London to EU offices including Frankfurt, Dublin, and Brussels within the next 6 months.
All of these moves come at a time when Barclays and Lloyds have scraped the bottom of the latest European banks stress test. Based on Reuters, this would mean that withstanding any future market shocks against a plunging economy, a disorderly Brexit or a governmental property and bonds sell-off might be a struggle for both banks. The additional pressure by the Competitions and Markets Authority (CMA) issuing legal directions for both financial institutes for failed Payment Protection Insurance (PPI) reminders, the higher PPI payouts than the rest of the UK banks and the increase in PPI complaints are bringing these two financial giants to their knees.
We’re here to help
If you don’t know whether you had any PPI or you are aware of a PPI policy on your mortgage, loan or credit card and you need advice, give us a quick call for a chat on 0800 954 0817 or visit our website and we will be more than glad to help just like we’ve helped thousands of people until today. Hurry up, the deadline has been set to 29th August 2019 for all complaints – if you miss the deadline, you miss your chance to claim!