The presidents of two major Wall Street firms have expressed concerns that the financial services industry in the UK would suffer in the aftermath of Brexit.
Wall Street Warns Brexit Could Damage UK Financial Services Industry
The President of Morgan Stanley, Colm Kelleher, has warned that London would certainly feel the impact of Brexit and it was only a question of how much.
At the same time, head of Blackrock, one of the largest investment firms in the world, Rob Kapito has said that following Brexit, there was significant worry in the global financial community.
Mr. Kapito also pointed out that voters had not been fully educated about the real issues prior to the EU referendum.
He said, “The unanticipated impacts of Brexit will be significant for everyone in the UK.”
Mr. Kelleher said that his firm’s immediate concern was over whether to go on with business as usual and continue to invest in the UK given that a potential Brexit agreement was still being negotiated.
In a statement he said, “It is the uncertainty that is a major concern.”
He added that a much larger concern was over whether banks would still have the right to trade across the EU without needing separate licenses for each country after Britain exits the bloc.
Mr. Kelleher said, “I am convinced that the City of London will continue to be a prestigious financial services center. However, a portion of our business will have to be moved from London and established in other headquarters in Europe but it is very hard to predict what the implications will be at the moment.”
He further said that Britain’s decision to exit the EU hampered the implementation of the Capital Markets Union, which is an initiative by the European Commission to boost the use of capital markets to finance infrastructure projects and companies in Europe. He pointed out that presently, banks are the major financiers in the continent.
As such, he urged the UK and Brussels to consider a prolonged transitional period for the financial services industry as part of any Brexit agreement.