Blog: Brexit pain for UK financial hub is just beginning: Study – Al Jazeera English

Brexit pain for UK financial hub is just beginning: Study

About 7,400 jobs and $1.4 trillion in assets have moved or could move to the EU from London, a New Financial study finds.

More than 400 financial firms in the United Kingdom have shifted activities, staff and a combined trillion pounds ($1.4 trillion) in assets to hubs in the European Union due to Brexit, with more pain to come, according to a new study by the New Financial think-tank.

“We think it is an underestimate and we expect the numbers to increase over time: we are only at the end of the beginning of Brexit,” the study published on Friday said.

The EU has offered the United Kingdom little in the way of direct market access for financial services, which were not included in the bloc’s trade deal with the UK that came into effect in January.

“That access is unlikely to be forthcoming, so it is perhaps better for the industry to take the damage from Brexit on the chin and focus instead on recalibrating the framework in the UK so that it is more tailored to the unique nature of the UK financial services industry,” the study said.

Some 7,400 jobs have moved from the UK or been created at new hubs in the EU, the study said. Bankers have told the Reuters news agency that some staff moves have been delayed due to COVID-19 travel restrictions.

The total of 440 relocations is higher than anticipated and well above the 269 in New Financial’s 2019 survey. New Financial believes the real number is well beyond 500.

Dublin, Frankfurt, Paris are winners

Dublin has emerged as the biggest beneficiary with 135 relocations, followed by Paris with 102, Luxembourg 95, Frankfurt 63, and Amsterdam 48.

Dublin’s Irish Financial Services Centre [File: Clodagh Kilcoyne/Reuters]

“This redistribution of activity across the EU has wound the clock back by about 20 years,” the study said.

Banks have moved or are moving more than 900 billion pounds ($1.2 trillion) in assets from Britain to the EU, while insurers and asset managers have transferred more than 100 billion pounds ($138bn) in assets and funds, reducing the UK tax base.

“We expect Frankfurt will be the ‘winner’ in terms of assets in the longer-term, and that Paris will ultimately be the biggest beneficiary in terms of jobs,” the study said.

Amsterdam’s toppling of London as Europe’s biggest share trading centre since January has been the most visible sign of Brexit in finance.

The study expects that 300 to 500 smaller EU financial firms may open a permanent office in the UK, far fewer than the prevailing forecasts of about 1,000.

The City of London will remain the dominant financial centre in Europe for the foreseeable future, but its influence will be chipped away, risking a reduction in the UK’s 26 billion pounds ($35.8bn) annual trade surplus in financial services with the EU, the study added.

Blog: Brexit back in the headlines – World First Foreign Currency Exchange

Good morning,

The pound has entered the final day of the working week on the back foot. Falling against the euro and dollar, we now find ourselves under the 1.15 and 1.38 marks to purchase both currencies.

Throughout April, sterling has been one of the worst performing currencies, which can be put down to a handful of reasons. With the Eurozone vaccination programme picking up steam, the UK has now seemingly lost the ‘advantage’ over other nations in the race to vaccinate the population first. There is also unrest in Northern Ireland over the Brexit deal, with the chief Brexit negotiator, Lord Frost, travelling to Brussels yesterday to discuss the deployment of processes for sea borders. Back in March, the EU mounted legal action on the UK for the unagreed delay on said processes.

Rounding off the busy week of data, today we see Eurozone CPI data released for March and consumer sentiment released for the US. Analysts are expecting a positive result for the sentiment figure, following strong non-farm payroll figures in March.

Jack Nicholls

Blog: ABTA raises post-Brexit labour concerns with government – Breaking Travel News

ABTA has written to Lord Frost, highlighting the needs of the travel industry in the future relationships with the European Union, post Brexit.

Minister of state Frost is currently negotiating with European officials over the final settlement.

The letter raises the very serious challenges relating to labour mobility owing to restrictions on temporary entry of tourism workers across the EU and continued access to essential health data and the pressing need to regain access to important health data lost after Brexit.

One of the main concerns of the travel industry is the loss the Posted Workers Directive, which, in normal circumstances pre-Covid-19, enabled the posting of around 15,000-20,000 UK workers each year into the EU.

ABTA said had been advised that it would be up to each member state to adopt rules that are more permissive for UK nationals.

However, the association is keen to highlight that a partial solution to the problem can be found by adapting an existing part of the UK immigration system.

The UK already operates a reciprocal Youth Mobility Scheme (Tier 5 visas) covering several countries and ABTA wants government to proactively extend the Youth Mobility Scheme to EU countries.

There is also significant support amongst the UK’s inbound tourism industry for an extension of the Youth Mobility Scheme.

Within UK-EU Agreement there are also several individual reservations which restrict the rights of UK nationals to perform certain roles in different member states.

One important example for outbound travel affects the ability of UK nationals to provide guiding services to tours in France, where the profession requires nationality of an EU member state.

There are also several other national exemptions for both tour hosts and tour guides.

This will create significant operational difficulties for UK travel businesses, forcing these businesses to hire locally, or to seek out dual nationality staff.

Luke Petherbridge ABTA director of public affairs, said: “The ability for workers to travel freely within the EU is particularly important for the travel industry and the government must work to ensure that as far as is possible there are mutually beneficial reciprocal arrangements in place to facilitate tourism.

“We need to create the conditions that allow the industry to flourish in the future and enable arrangements to be put in place in the coming months to provide operators with the ability to send UK workers to destination countries in time for the peak seasons in the years ahead.”

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Blog: U.K. and EU Are Still at Odds Over Post-Brexit Northern Ireland – Bloomberg

A truck disembarks from the European Causeway at the Port of Larne, in Northern Ireland.

A truck disembarks from the European Causeway at the Port of Larne, in Northern Ireland.

Photographer: Paul Faith/Bloomberg

Photographer: Paul Faith/Bloomberg

The U.K. and the European Union plan to meet again in the next two weeks after failing to resolve their differences over how the Brexit trade deal is affecting Northern Ireland.

David Frost, who leads on the U.K.’s relations with the EU, and European Commission vice-president Maros Sefcovic met Thursday evening in Brussels.

There were few expectations of a breakthrough and on Friday both sides put out statements, with the U.K. referring to some “positive momentum.” The EU said the two men “used the occasion to take stock of all outstanding issues.”

An EU official had warned before the dinner that if a deal was to be reached it would still be many weeks away.

Northern Ireland Dispute Far From Resolved as EU, U.K. Meet

The impact of Brexit — which created an effective trade border down the Irish Sea — has caused upheaval in Northern Ireland, provoking rioting and violence plus disruption and extra costs for businesses.

The EU has brought legal action against the U.K. over its implementation of the protocol, after Britain unilaterally extended a waiver on customs checks on some goods entering Northern Ireland from Great Britain. Yet in a goodwill gesture, it also decided to postpone moving forward with the proceedings.

Blog: Britain to use Brexit “flexibility” to make City of London more attractive – Reuters

Canary Wharf stands beyond the Maritime museum from Greenwich Park in London, Britain December 27, 2020. REUTERS/Simon Dawson

Britain will use its freedom from European Union rules to regulate markets flexibly and make the City of London even more attractive to global investors, the Financial Conduct Authority said on Tuesday.

Britain’s financial sector has been largely cut off from the bloc since full Brexit on Dec. 31, with no sign of increased direct access any time soon as the EU builds up capital market autonomy in stock and derivatives trading.

Nausicaa Delfas, who heads up the FCA’s international division, said Britain’s financial market has entered a “new phase,” but would remain open to the world and built on “robust” standards.

“Our new found position allows the FCA to have a new, more nimble approach to domestic policymaking. We can focus on using this new flexibility for the global markets that we host in the UK,” Delfas told a City & Financial conference.

“The departure from the EU presents us with opportunities to do things differently, and that is an opportunity we will grasp.”

The FCA has begun easing curbs inherited from the EU on “dark” or anonymous, off-exchange trading in blocks of shares.

Two government-backed reviews have recommended easing listing rules to attract more foreign primary and secondary listings to compete better with New York, Singapore and the EU.

The finance ministry will set out its own proposals for capital market reform in coming weeks, and Clare Cole, the FCA’s executive director for market oversight, told the conference the watchdog is keen to undertake a more “fundamental review” of the markets its operates.

KEEPING UP MOMENTUM

Easing listing rules is “controversial” and the FCA will consult broadly to ensure the “right level of protections,” Cole said.

“We need to think about an appropriate regime for overseas issuers who are listed elsewhere and how we can help in terms of disclosure requirements,” Cole said. “We see a package of reforms over a period of time.”

Jonathan Hill, the UK lawmaker who chaired the listings review, said after years of pre-Brexit paralysis in the City, there was now a rare moment of opportunity to reform.

“The challenge for us all is how do you keep momentum going,” Hill said.

EU firms with operations have applied for a permanent UK licence, but Delfas cautioned that authorisation would only be granted if there are good relations with their home regulators.

Britain and the EU have agreed on a new framework for regulatory cooperation but it only makes provision for informal, non-binding talks twice a year.

Many financial firms in London have opened hubs in the EU to avoid disruption from the lack of direct City access to the bloc, creating tension between regulators over sufficient staffing at the new EU and existing UK operations.

Delfas said the FCA continues to expect companies to discuss any transfer of functions and staff from the UK that have not been previously agreed.

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