Financial firms will leave Britain after Brexit, the head of the International Monetary Fund Christine Lagarde warned. According to her, most will flock to EU countries. That is why, she argues, the bloc needs to enhance its regulatory and supervisory capacities to cope with the likely influx, Business Review reported. Many financial companies are expected to relocate outside the UK after Brexit, in order to maintain their passporting rights. Passporting allows financial companies authorized in one EU state to sell services and products in another. “In the near-term it is critical to ensure that regulatory and supervisory capacities are prepared for the influx of financial firms that will move to continental Europe–and Ireland–as a result of Brexit,” Lagarde told audience at ‘The Euro at 20’ conference in Dublin, Ireland. According to Lagarde, work was needed to enhance the eurozone’s resilience and secure its future. “The eurozone needs truly integrated financial and capital markets that allow companies to raise financing across borders more easily and support investment.”
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