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Chinese Banks to Deepen UK Financial Ties

Chinese Banks to Deepen UK Financial Ties Chinese Banks to Deepen UK Financial Ties

More Chinese banks want to set up shop in London despite the Brexit vote which has prompted foreign lenders in the capital to consider bases in continental Europe.

British and Chinese government officials met in London on Thursday to unveil a “strategic plan” to deepen financial and economic ties between the two countries, Reuters reported.

“It will support the integration of China’s financial markets into the global market through London’s financial center, exchange of expertise and increase market access,” Britain and China said in a joint statement.

It takes forward plans for closer ties between the London and Shanghai stock exchanges.

The two countries underscored a commitment by their regulators to cooperate more closely in banking, asset management, insurance, and financial technology or fintech.

“Both sides welcome the continuing interest by firms, including Agricultural Bank of China (UK), Shanghai Pudong Development Bank, and others, in submitting further applications to establish branches in the UK, once they are ready to make applications,” Britain and China said in a joint statement.

Regulators from both countries were committed to working together to ensure an “effective review” of all proposals from the banks, it added.

The announcement may help soothe jitters in the City of London financial district that foreign banks will shun Britain because it is leaving the EU.

British regulators have already authorized London branches for Bank of Communications Co, and China Merchants Bank.

The China Banking Association will also open a London office “when conditions permit”. The Shanghai Clearing House also intends to set up a London office next year, the document said.

Chinese authorities will support Aberdeen Asset Management in its application to register private fund management entities in China, and then launch private fund products after authorization.

Chinese authorities will also “positively” consider the application of Heng An Standard Life , part-owned by Standard Life, for a pensions licence in China, the document said.

A report last Tuesday said that global banks are quietly building up their investment banking teams in Frankfurt as the German deals market hots up, boosting the city’s chances of being one of the financial centers to benefit most from Britain’s vote to leave the European Union.

The trend puts Frankfurt in a good position to benefit from any shift of banking activity out of London after the Brexit vote, already bolstered by playing host to the European Central Bank and the EU’s second biggest capital market.

 

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