K & K G L O B A L C O N S U LT I N G
RESEARCH
L
ooking at the news over the last few months, it seems
like the British decision to trigger Article 50 will most
likely result in an opportunity for other European
capitals to attract financial services firms across the
European Union (“EU”) over the next five years. To
date, K&K Global Consulting (K&KGC) has not seen any British
authorities or associations responding with any substantial
counter arguments, except the prospect of potentially reducing
corporation tax, so it would become even more attractive for
financial services firms to retain their business within the UK post
Brexit. The true monetary outcome for the UK based on their
Brexit decision, beyond self-governance and autonomy, will be
realised over a much longer period given the speculative divided
expectations about the survival of the European Union and the
common currency.
Banks
The first and most obvious post-referendum move in the United
Kingdom is that banks relying on European Union passporting
rights based on their London presence will lose such passport
access to the single market post Brexit. A number of significant
banks have already publicly announced that they will move a
10
proportion of their staff from London to other European capitals.
To illustrate the potential balance of power, Jamie Dimon, CEO,
JP Morgan (source Bloomberg 11th July 2017) believes that
the EU authorities will over time have the power to determine
to what extent the banks need to move their operations from
London to the European Union.
While the world is watching the implications of Brexit, the once
Swedish state-owned bank Nordea have decided to move their
HQ out of Sweden to Finland to avoid the new costly Swedish
regulatory requirements imposed by their national government.
Nordea has reportedly predicted significant cost savings by
moving their headquarters to Finland under the supervision of
the European Central Bank (ECB). K&KGC finds it noteworthy that
national politicians and regulators within the EU, with low levels
of entry and exit, must place higher emphasis on harmonisation
or they will face public humiliation by losing out on business to
the disadvantage of the voting population.
Asset Management
While the UK Financial Conduct Authority (FCA) continue to
increase their oversight of the UK asset management firms, the
French, German, Irish, Luxembourg and Spanish authorities and
www.buysideintel.com
Autumn 2017