France to Receive €150 Billion Windfall as a Direct Result of Brexit
According to Francois Villeroy de Gala, UK based financial firms may move €150 Billion across the channel before the end of the Brexit transition period
The chief of the Bank of France believes that France could be €150 billion richer once the post-Brexit transition period ends. Francois Villeroy de Gala recently made the claim at a banking event in Paris. The sum includes capital held by French groups moving assets “home” from British branches and capital held by more than 40 UK-based banking entities who wish to continue trading in France.
Villeroy de Gala also stated that an additional 31 financial bodies (mostly investment companies) are exploring the possibilities of registering in France, and currently have applications in review. He went on to say that a temporary fudge to allow European financial markets to continue using London clearing-houses won’t last forever and there remains “a handful of small companies” which “must immediately speed up the process to avoid being caught unprepared in January”.
Brexodus – are London’s days numbered?
Brexit think-tank Bruegel has estimated that London could lose 10,000 banking jobs and 20,000 roles in the financial services industry as a direct result of Brexit. Briitish based financial services firms have already shifted around 7,500 employees and more than £1.2 trillion in assets to the European Union ahead of Brexit. The finance industry, as a whole, has added 2,850 jobs in the EU since Britain voted to leave in 2016, with Frankfurt, Luxembourg & Dublin the biggest beneficiaries.
On 31st December 2020 London will officially lose its passport to provide services across the EU. It will then have to rely on the bloc granting the UK ‘equivalence’ in order to continue doing business in the region. However, worsening relations between the EU and the UK mean that a trade deal appears increasingly unlikely and without a trade deal there is no guarantee that ‘equivalence’ will be granted. As such, companies are making concerted efforts to increase their presence on the continent and, according to consulting firm EY (previously known as Ernst & Young), around 400 relocations have been announced in the last month alone.
JPMorgan has recently moved assets and staff to Europe, and Goldman Sachs is reportedly planning to do the same.
Read the original source article by Henry Goodwin: Goodwin H. (October 14 2020). Brexit could make France €150 billion richer by end of the year. The London Economic. https://www.thelondoneconomic.com/business-economics/brexit-could-make-france-e150-billion-richer-by-end-of-the-year/14/10/
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