London 'bitten' as EU banking watchdog plans exit

RELOCATING: The Brexit fallout may hurt London's role as a top financial centre if jobs are lost to other rivals like Paris and Frankfurt.


    Jun 28, 2016

    London 'bitten' as EU banking watchdog plans exit


    THE European Union is preparing to move its European Banking Authority from London following Britain's vote to leave the Union, EU officials said on Sunday, setting up a race led by Paris and Frankfurt to host the regulator.

    Coming a day after Britain's Jonathan Hill resigned and was replaced as EU financial services chief by the Commission's "Mr Euro" Valdis Dombrovskis, the move underlines how the city of London can expect to be frozen out of EU financial regulation - and possibly from Europe's capital markets - depending on the terms of Brexit.

    While those who argued for Britain to leave the EU said the financial industry would thrive without EU shackles, some of its biggest employers, including

    JPMorgan are scouring Europe to find new locations for their traders, bankers and financial licences.

    The EBA, whose 159 London employees write and coordinate banking rules across the bloc, is expected to be relocated "soon", two EU officials told Reuters.

    All EU agencies are based in member states.

    EBA chairman Andrea Enria said before Thursday's referendum that the watchdog, founded in 2011 to improve regulation after the global financial crisis, would have to move if Britain chose to leave.

    An EBA spokesman said on Sunday that the EU will have to decide on relocation and, in the meantime, the agency would continue to operate in London.

    Other European capitals are keen for a slice of Britain's financial services industry which contributed £190 billion (S$346 billion) to the economy in 2014, roughly 12 per cent of economic output.

    The industry employs 2.2 million people in Britain, including around 90 per cent of United States investment banks' European staff.

    Paris and Frankfurt are the two largest financial centres on the continent and are seen as the most likely new locations for the EBA.

    Italy's financial capital Milan could also put itself forward.