Julian Bray writes: I must admit for a fleeting moment - no a nanosecond - I was really worried about the prospect of boatloads of British Bankers like refugees but fleeing the UK and physically setting up shop in Europe. It does of course, if true, hold out major repercussions for the aviation industry as the industry deals mainly in US dollars, but also a basket of other major currencies.
The reason for the supposed flight of UK bankers to say Frankfurt is all because of Brexit, i.e. the UK leaving the European Community. But hold on, we suggest it is only because TV News weekend scriptwriters hadn't bothered to carefully read, and fully understand, the content of the keynote speech by the Bankers fee earning lobby outfit BBA (British Bankers Association) .
The keynote speech causing the alarm just 1,200 words or five typewritten pages delivered by Chief Executive Anthony Browne (note the 'e' not just any old Brown) at an International Banking Conference, so must be important rather like a financial summit?
But wait, this particular conference, staged in the not very large, The Old Brewery venue in the City, is organised by the British Bankers Association! The paid lobbyists for ....British Bankers!
The truth is banking these days is a dynamic truly global business, working around the clock, from many different financial centres with data and deals flowing by satellite in real time, and all at the mercy of world markets, not just politicians.
The speech is however worth reading, if only to hold some bankers feet to the fire, if they do decide to 'up-sticks' and decamp. Your financial directorate might also consider seeing what is out there post brexit, but what should be clear to any departing bankers, the UK is open for business and the Euro will never in our lifetime be the UK currency of choice. Any special favours the departing banks may require in future may be denied them. Bankers basing themselves in Paris will find the mandatory employment protocols afforded to all staff in this French socialist political environment, onerous to say the least.
Marseille se rêve en "hub numérique" mondial !!!!!!
|Agence France-Presse |
Clearly this whole hyped up story smacks of 'Turkeys voting for Christmas' You may recall in the bad old days the previous BBA chief executive ex-MP Angela Knights ( not certain if she ever had an extensive staff) was forever popping up on television screens in loud floral print dresses, and heavy slap, defending the then outrageous excesses of British bankers, many since have been sacked, moved on, or sideways, banks bailed out by the British tax payer and one British Banker even losing his knighthood ( and coveted elite golf club membership by all accounts) ...will Sir Philip Green of BHS infamy be following this path?)
STORY CONTINUES >>>>>
BBA Chief Executive Anthony Browne speech
BBA International Banking Conference, 20 October 2016
Check against delivery
Ladies and Gentleman. Welcome to the BBA’s Annual International Banking Conference 2016. A lot has changed since we last gathered here a year ago The British people have voted to leave the European Union, we have a new Prime Minister and a new Cabinet. But in many ways nothing has really changed – at least not yet.
The UK will remain in the EU - until 2019 and we still have a Conservative-majority government. Brexit will continue to dominate the headlines for the foreseeable future and it was the main topic of discussion during party conference season. These are turbulent times for the UK - and for banks
International banking is probably more affected by Brexit than any other sector – it is our biggest export industry by far, it gets its rules and right to serve cross-border from the EU, and it is internationally mobile.
Fortunately our banking sector weathered the initial storm after the referendum, and the economy has so far proved to be resilient. It was evidence that the banks are in a much stronger position than 2008, with capital held by the largest institutions 10 times higher than before the crisis. But the biggest challenge comes not from the referendum itself, since the day after nothing had actually changed.
The biggest challenge will come from when we actually leave the EU in 2019.
The industry wants to ensure it can carry on serving their customers both in the UK and across Europe. In order to do this, banks need as much clarity as possible over the Brexit negotiations so that they can plan for the future with confidence.
The Prime Minister has put an end to uncertainty around the timetable for the negotiations by pledging to trigger Article 50 no later than the end of March 2017.
But banks now need clarity on what sort of future relationship the government wants the UK to have with the EU.
We (BBA) are working with ministers and officials to deliver the best deal for the UK, and for Europe. This is in the interests of all Europe, because bilateral market access underpins jobs and growth on both sides of the Channel.
Europe’s integrated financial markets have been good for jobs and growth across the continent in the past, and will be good for jobs and growth in the future.
The integrated financial market makes it easier and cheaper for French farmers, German manufacturers and Italian fashion designers to secure funding. It also helps EU citizens get better returns for their savings and have access to a wider range of products.
We need to retain Europe’s integrated financial market, not split it in two by building walls along the Channel.
We need to retain the free trade in financial services The only way to ensure that is for banks based in the UK to retain full access to the single market in financial services…
…and for European banks to retain full access to the UK’s global financial centre, and customers
In other words, we need to retain some version of passporting.
The alternatives such as equivalence are poor shadows of genuine passports. They only allow a much narrower range of services, provide much more limited rights at greater cost, and can be withdrawn at short notice.
Other centres are actively lobbying banks to move jobs and business away from the UK. I recently heard that the French Treasury told a group of banks it was trying to persuade to move to Paris that although the UK might have to be granted equivalence initially, the question is how quickly they could force the UK to lose equivalence.
This would be the worst of all worlds. Forcing the UK to be a "ruletaker" if it is to remain equivalent, with no say over regulatory changes that would affect our future.
This underlines that London’s position as Europe’s financial capital should not be taken for granted.
Whatever the ultimate deal between the UK and the EU, it is likely to take years to negotiate and yet more years to ratify.
It seems highly unlikely we will have it in place when the UK leaves the EU in 2019.
If that happens, the UK will fall back on WTO rules, which have no meaningful provision for financial services. We will overnight lose the passports that underpin the free trade in financial services.
We face a "cliff edge" where suddenly the £20bn a year cross-channel trade in financial services would be thrown into legal uncertainty. In many cases, UK banks will no longer be able to legally sell services to their customers in the EU. There is a big risk to disruption to markets.
That is why it is so important for the industry to have transitional arrangements, to ensure customers can continue getting the financial services they need between the UK leaving the EU, and the new UK-EU partnership agreement coming into force.
We want an orderly transition that minimises any potential disruption for customers, businesses and markets.
With so much uncertainty about the next couple of years, international banks are all planning for the worst case scenario – that we end up on WTO rules. International banks have set up project teams to work out what operations they need to move by when, and how best to do it.
It can take years to move a business. So they cannot wait until the end of Article 50 negotiations in 2019, but have to start taking action much sooner. Their hands are poised quivering over the relocate button, with the first movements expected in the coming months.
There is no room for complacency. Everybody in this room has an interest in delivering a Brexit that works for both the UK and the EU 27. Today’s conference features a number of panels that will examine how we can rise to this challenge And ensure that customers, clients and businesses can continue to benefit from our role as the world’s leading hub for international banking.
Of course Brexit is only one of the challenges facing us today. Interest rates are low or negative across the continent Growth has remained flat at best for almost a decade.
The macroeconomic outlook in the UK and Europe is sombre. These conditions have increased pressure on revenues and profitability across the sector, and made it more difficult for banks to deliver a sustainable return on equity.
A strong banking sector underpins a strong economy. That is why it is crucial that the UK Government sets out a clear vision for the UK’s future as an international banking centre. The industry has faced five bank specific taxes in recent years – raising more than £40 billion for the Exchequer The BBA will be publishing a new report in the coming weeks outlining the scale of the industry’s tax contribution to the Exchequer.
Banks are firmly committed to paying our fair share But we are now at a tipping point that threatens UK jobs and growth. It is essential that the UK remains a competitive place to do business for international banks.
We hope that the Chancellor will take competitiveness into account when he delivers his first Autumn Statement next month. We believe there should be a commitment to the normalisation of banking taxes in the UK and the removal of sector specific tax measures. In particular the date for the reduced scope of the bank levy should be brought forward to within the life of this Parliament.
There should also be a commitment to the banking tax surcharge being seen as a temporary measure, designed to compensate for historically low corporate tax receipts that are already beginning to correct.
The banking corporation tax surcharge should be phased out as soon as possible.
This is no time to rest on our laurels. If the UK is to stay ahead in the global race, we must seize new opportunities on the horizon. I am looking forward to hearing what Mark Garnie, the Minister for International Trade, has to say on this issue shortly.
The City of London has always embraced new markets, helping to provide the finance and expertise needed to support trade around the globe.
London is the premier western offshore Renminbi centre and the volume of Islamic finance taking place in the UK is increasing rapidly.
FinTech is if anything an even bigger growth opportunity.
Silicon Valley has long been regarded as the home of digital innovation but a recent report from EY rated the UK as the world’s leading FinTech centre.
Digitisation of banking is a huge opportunity – not simply a threat Banks are keen to support the sector’s growth. We are increasingly seeing FinTechs collaborate with banks as they try to scale up their businesses.
How the industry is responding to disruptive technologies will be the main topic of discussion during our panel later this morning. We will also hear later this afternoon about how banks are working with law enforcement and policymakers to counter the growing threat of cybercrime.
Before concluding, I'd like to give special thanks to our headline sponsors Unisys for their support. There is no denying that the industry still has a number of big challenges to overcome.
We live in interesting times. That is why it is essential that we work together to seize the new opportunities on the horizon
And ensure that long after Brexit is a distant memory, we remain a world leading hub for international banking.
JULIAN BRAY +44(0)1733 345581 Aerospace & Incident Management Expert, Journalist & Broadcaster, Aviation Security & Airline Operations, Travel / Maritime & Cruise Industry, NUJ, EQUITY, LIVE ISDN LINK, Broadcast ISDN COOBE ++44 (0)1733 345020 e&oe Old faithful NOKIA: 07944 217476 www.aviationcomment.com