On 29 January 2018 the European Council published directives covering the second phase of the Brexit negotiations—specifically the arrangements for transition towards UK’s withdrawal from the European Union. In short, a transition period has been outlined to give businesses and government ample time to adjust to the new landscape: following the UK’s departure from the EU on 29 March 2019 it will continue to follow EU rules until 31 December 2020, but will not be involved in making decisions. In other words, the major changes stemming from Brexit are yet three years away. This hasn’t stopped major financial institutions from planning for the future, however.
In the wake of the EU referendum result, global banks in London voiced their intention to move some of their UK-based resources abroad. Some have already begun to restructure. To date, ten of the largest global banking institutions in London plan to relocate roughly 16% of their UK staff to financial centers across continental Europe. Around 10,000 finance jobs are slated to leave the UK in the next several years, according to a Reuters survey. The most popular destinations for the migrating positions appear to be Frankfurt, Dublin, Paris and Madrid.
UK-based financial institutions may no longer be subject to EU regulations or the supervisory of the European Central Bank. Brexit also implies the respective loss of the EU banking passport for financial institutions and their branches based in London and across the UK. This may create a compliance requirement reminiscent of current EU banking regulations. Much of the estimated 1.8 trillion Euros held in assets within London and the UK may need to be re-domiciled under the purview of continental authorities.
During this time of great bureaucratic change, banks can turn to trusted advisors for guidance through the reorganization gauntlet. The looming logistical concerns resulting from Brexit will require stringent planning and implementation. MCG has been at the forefront of related initiatives at major investment banks, providing project management and testing governance support to programs commonly spurred by mergers and new regulatory mandates. Our expertise with such critical undertakings primes us to guide our clients efficiently through the process. To learn how MCG helps major financial institutions prepare for Brexit, visit our website and contact us today.
Monticello Consulting Group is a trusted management consulting firm advising clients in the global financial services industry, partnering with them to achieve their vision of excellence. To better understand the impact of Brexit on capital markets and banking institutions, please contact email@example.com