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UK to stay as Europe's banking hub after Brexit

By Jonathan Powell in London | China Daily | Updated: 2020-01-22 10:20

More than 1,000 financial services companies in the European Union plan to open offices in the United Kingdom after Brexit in a sign Britain will remain Europe's banking hub after the nation's withdrawal from the bloc.

Banks, asset managers, payments companies and insurers in the EU are among those that have already made applications so they can continue serving UK clients, the regulatory consultancy Bovill said on Monday.

Reuters reports that the new offices would help companies counter the loss of business as unrestricted two-way access between the UK and the EU comes to an end in December following a Brexit transition period.

By October, 1,441 EU-based companies had applied to the Financial Conduct Authority for temporary permissions to operate in the UK after Brexit, according to figures obtained via a Freedom of Information request from the consultancy.

Of that number, 1,000 appeared to be seeking permission to set up an office in the UK for the first time, according to the data.

"These figures clearly show that many firms see the UK as Europe's premier financial services hub," said Michael Johnson, a consultant at Bovill.

Boost for London

The findings are a boost for London's prospects, Johnson, added. "The high proportion of firms without an existing UK branch that have applied for the temporary permission suggests there will be some movement of staff from these EU 27 firms into the UK.

"Although much attention has been given to the number of UK firms moving staff and operations into Europe, there is also likely to be movement in the opposite direction.

"The results of the FOI (Freedom of Information) may have been anticipated by those in the industry, many of whom have recognized for some time that London remains Europe's only truly global financial center, and firms on the continent with global aspirations will need to continue to do business here."

Most applications came from Irish financial companies, with 228.In second place was France, with 170 submissions, Cyprus was third, with 165, and Germany was fourth, with 149 submissions.

But Bovill said: "In practical terms, these figures mean that European firms will be buying office space, hiring staff and engaging legal and professional advisers in the UK. This augurs well for the UK economy, as the country will retain its reputation as a prime location for financial services in Europe."

The full extent of the UK and EU's access to each other's markets after the end of the transition period in December is subject to ongoing negotiations, but the resulting agreement is unlikely to cover the full range of financial services.

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