World Economy

British Banks Lobby to Keep Access to EU Market

British Banks Lobby to Keep Access to EU MarketBritish Banks Lobby to Keep Access to EU Market

A week after Britons voted themselves out of the European Union, many London-based bankers and their employers face two options if they are to secure their futures: lobby or leave.

Some investment banks, anxious not to stir speculation of an exodus from the historic city of London and its modern counterpart at Canary Wharf, have given out “business as usual” messages since last week’s shock referendum result, Reuters reported.

But beyond the soothing words, the wider industry is hastily organizing a lobbying effort in the hope London can keep selling financial services across Europe, a right to which it has become accustomed but may lapse when Britain finally exits the 28-nation bloc.

The alternative for banks and bankers, growing increasingly insecure in an information vacuum that has developed since the June 23 vote, is to get out. Headhunters report a level of anxious calls they haven’t seen since the 2008 global crisis, with bankers asking about prospects in rival financial centers that remain in the EU, or those in Asia and the US.

Banks and other financial firms have rallied together, forming a group to devise a strategy for protecting the turf of an industry that is Britain’s biggest exporter and accounts for more than 10% of its tax revenues.

Even Britain’s biggest lenders are relying on the group—led by Shriti Vadera, chairwoman of the UK arm of Spain’s Banco Santander who is also a former business minister—for guidance in such uncertain times.

 Clipping the Wings

“We are looking to them to have an intelligent response,” Barclays chairman John McFarlane told an industry event. “We neither know the shape or direction of things to come. It’s far from certain what we might be able to secure from discussions with the EU.”

With the British government in disarray, European politicians are threatening to clip the wings of the London financial center that is home to more than 250 foreign banks and more than three-quarters of the EU’s capital markets activity.

French President Francois Hollande has backed calls for London, the world’s biggest currency trading center, to lose its right to clear deals denominated in euros.

Likewise, the right of banks based in Britain to operate across the EU under the bloc’s financial “passporting” arrangement could also go if it loses access to the single European market.

Britain has yet to say when it will formally inform the EU of its intention to leave, a move that will start two years of divorce negotiations.

Prime Minister David Cameron has said he will resign, but left the formal exit notification to his successor who is unlikely to be installed until September.