Financial Times: Principal Elisa Haining Comments On Uncertainty Of Capital Flows Ahead of Brexit
Aug 7, 2018
The Financial Times reported that with only eight months before the UK’s exit from the EU, banks are starting to put into action their Brexit contingency plans, setting up alternative European hubs in places such as Paris, Frankfurt and Dublin.
Quoting Oliver Wyman Principal Elisa Haining, the article highlighted it nevertheless remains unclear how much of banks’ European assets and capital that they currently book in London will be forced to move to these alternative hubs. Almost a third of corporate and investment banking revenues recorded in the UK are for clients in the rest of the EU.
If they were forced to have several pools of capital around Europe, it would dilute banks’ profitability in the region and may cause them to consider shifting more assets to another financial center, such as New York or Hong Kong.
“Particularly when the economics of European banking are already weak, creating capital inefficiencies will make it more expensive for banks to operate in Europe,” said Elisa.