Anthony Browne, head of the British Bankers’ Association, sparked fury yesterday by saying smaller banks could react to the uncertainty by moving operations overseas within weeks.
He predicted that larger financial institutions would follow in the first few months of next year, saying: ‘Their hands are quivering over the relocate button.’
But the gloom-laden claims were undermined by the fact that a number of High Street banks said leaving the EU would make little difference to their business.
Santander pointed out their Spanish owners were happy to have operations located outside the EU.
One bank told the Daily Mail the BBA’s warnings were ‘nonsense’, while another insisted: ‘Brexit is a bit of a non-issue for us.’
Last night John Redwood, Tory MP for Wokingham, also pointed out that foreign banks are currently investing in Britain.
‘We have seen ING move more of its traders into London recently, and Wells Fargo announced a new £300million headquarters – after the Brexit vote,’ he said.
‘So far the actual responses from the banks themselves have been positive not negative, so I find what the BBA is warning to be quite difficult to believe.’
Conservative MP Peter Bone added: ‘This is nothing more than a continuation of Project Fear. These people simply have not accepted the referendum result.’
Mr Browne – a former journalist for the BBC and The Times – said fears that EU leaders will want to erect trade barriers to weaken the City of London during Brexit negotiations were to blame for the banks’ supposed move.
Writing in The Observer, he said: ‘Banking is probably more affected by Brexit than any other sector of the economy.
‘It is the UK’s biggest export industry by far – but it also gets its legal rights to serve its customers cross-border from the EU.
‘For banks, Brexit does not simply mean additional tariffs. It is about whether banks have the legal right to provide services.’
The BBA chief added: ‘Banks might hope for the best but have to plan for the worst. Most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers, and how best to do it.
‘Many smaller banks plan to start relocations before Christmas – bigger banks are expected to start in the first quarter of next year.’
After his career in journalism, Mr Browne entered the world of banking himself by taking a position at Morgan Stanley.
He has previously written eurosceptic pieces, but has always argued that Britain should stay in the European Union.
But a spokesman for Santander told the Mail last night: ‘We are one of the most British banks there is, we just happen to be owned by a Spanish bank.
‘But they have operations all over the world so they are comfortable with having a business which is not in an EU country.’
A source at another major High Street bank said: ‘I’m surprised by the comments really, and they’re inconsistent with what we’ve been saying so far. Brexit is a bit of a non-issue for us.’
Another major High Street bank said: ‘We are not sure that Mr Browne was really talking about the likes of us. It feels more like this is about global investment banks rather than us.
‘The comments didn’t resonate. It doesn’t make sense for us – we’re headquartered in the UK and we have a clear strategy for the UK.’
Richard Tice, co-chairman of anti-EU pressure group Leave Means Leave, said: ‘Similar apocalyptic predictions were made when the UK took the sensible decision to not join the Euro.’
Andrew Bridgen, Tory MP for North West Leicestershire, added: ‘We’ve heard all this before. It would be unusual for banks to jump ship before the terms of our exit are known – indeed, before negotiations have even started.
‘And if any banks do leave, I hope they repay the British taxpayer for all the bailouts they have received.’
Jacob Rees-Mogg, the Tory MP for North East Somerset, said: ‘The BBA has gone from being a lobbyist for British banks to a lobbyist for the European Union.
‘It worships at the shrine of the EU and does not believe anything can work outside it. It is not doing a good job of representing the British financial industry.’
Meanwhile Nigel Farage told LBC Radio he had ‘nothing but contempt for the banks who are wedded to the concept of the European Union’.
A Government spokesman said: ‘We are determined to maintain the City’s leading position as one of the key centres of global finance as we make a success out of Brexit.’
24th October 2016, Daily Mail