Oh dear, Brussels! City defies Brexit gloomsters to outgun EU and French rivals
Hermann Kelly slams financial burden of EU
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In a major blow for Emmanuel Macron, British banks made more profit than French rivals for the first time since 2015, despite Brussels officials desperately trying to shift more jobs out of London and onto the continent since Brexit. The buoyant banking sector was fourth only behind the global financial powerhouses of China, the US and Canada. UK banks generated £46billion in pre-tax profits last year as big lenders were significantly boosted by a strong recovery from the economy after the Covid pandemic, as well as a private equity deal-making boom and a soaring housing market.
The Banker’s Top 1000 World Banks ranking showed British lenders managed to trump their French counterparts on profits for the first time since before the European Union referendum in June 2016.
But perhaps more significant is UK banks collectively made more profits than any other European country as it enjoys its new-found sovereignty outside the continental bloc.
Brexit doubters have continued to insist Britain will struggle to relive past glories outside the EU and that they have yet to see the benefits of leaving the bloc.
However, the latest boost for the UK banking sector comes despite the EU ramping up efforts to deflect more business out of London and onto the continent after Brexit.
Recently, the European Central Bank (ECB) ordered eight banks to relocate more traders out of the capital and into financial hubs in the continent, in particular Paris and Frankfurt.
This was done after concerns arose that companies were becoming out of reach from European regulators.
Since the Brexit vote more than six years ago, the UK’s lucrative financial services sector has been a key battleground with Brussels as rival European cities go head-to-head with London to attract bankers to their cities.
France has been one of the countries at the forefront of this attempted movement, and in 2018 set out plans to offer language lessons to London-based bankers and their families.
French President Emmanuel Macron also made desperate attempts to win over bankers at his annual “Choose France” events at the Palace of Versailles in Paris.
Global banking giants JP Morgan, Goldman Sachs, Morgan Stanley and Bank of America have all pressed ahead with plans to increase their presence in the French capital. In 2019, the European Banking Authority also moved from London to Paris.
But it appears that not all finance staff at the global behemoths have been convinced to make the move out of London and into a hub located on the continent.
Last year, when JP Morgan tried to move 15 London traders to Paris, they were met with a backlash when around half of that number resigned, according to sources speaking to Bloomberg.
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Furthermore, consultants at multinational professional services firm Ernst & Young have estimated that just 7,000 roles have moved out of Britain since the Brexit vote in 2016.
This is far smaller than the 200,000 job losses predicted in the lead-up to the referendum.
Chancellor Rishi Sunak is also preparing to unveil his plan for a bonfire of EU financial rules later this month to boost Brexit Britain, according to reports.
He will reportedly outline details of his Financial Services and Markets Bill during a Mansion House speech on July 19.
Mr Sunak will then reportedly introduce the legislation to the Commons two days later before Parliament breaks for its summer recess.
The measures would look to boost Brexit Britain’s competitiveness by ditching Brussels’ rules on financial services.
A Treasury spokesperson said: “As announced in the Queen’s Speech, the forthcoming Financial Services and Markets Bill will enhance our position as a global leader in financial services, capitalise on the benefits of Brexit by cutting EU red tape and promote a competitive marketplace which spurs investment to deliver for individuals and businesses.
“The bill will be introduced when parliamentary time allows.”
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