Some 7,400 finance jobs, far less than originally planned, have been moved from London to the European Union’s new banking hubs, but COVID-19 “may mask what is really going on”

LONDON, UK – Making progress in global finance after Brexit requires sustained push from the UK government, the City of London’s chief policy officer said on Wednesday (Jan.5), adding that COVID-19 may mask some the impact of leaving the European Union.

Britain’s financial sector has lost most of its access to the EU, which was its biggest export customer, after completing its exit from the bloc a year ago.

And while he adjusted smoothly to Brexit, all the implications were still pending, Catherine McGuinness, whose five-year tenure as policy chief for the Square Mile financial district, told Reuters. “ends in May.

Some 7,400 jobs in finance, far less than initially expected, have been moved from London to new EU banking hubs, but COVID-19 “may mask what’s really going on,” McGuinness said.

Pressure to move jobs to EU hubs eased last year due to COVID-19 lockdowns.

“We are certainly not at a new normal…. We need to put Brexit behind us. What really matters now is to maintain our competitive advantage in the future, ”she added.

“It’s not a given that people will want to come to London.”

Amsterdam overtook London to become Europe’s largest equity trading hub a year ago, while some derivatives business moved to New York.

Banks in London are expressing frustration with the cost and uptime of duplicate UK and European hubs, but they are still determined to have operations in the capital, McGuinness said.

The European Central Bank has resumed pressure on banks in London’s financial districts to staff their new European hubs adequately after delays due to restrictions linked to the pandemic.

McGuinness praised the UK Finance Department’s promise to open a ‘new chapter’ in financial services and its proposals to make the financial sector more attractive globally, with some changes such as flexible listing rules already. in place.

More needs to be done to be at the forefront of global finance and make the most of Britain’s new situation, she said, adding that after much consultation action was needed. .

Reforms at the pace

The UK Finance Department responded by saying it is sticking to its roadmap to keep the City of London at the top of the table by making it more open, competitive, technologically advanced and sustainable.

“We will continue to work at a sustained pace, alongside industry and regulators, to advance our reforms,” ​​he said.

McGuinness said relations with the EU must be put on a “new basis”, although a proposed cooperation forum for financial watchdogs has yet to be approved by the bloc.

Brussels has said it wants the feud between the EU and Britain over the Northern Ireland Protocol to be settled before it can begin to restore confidence in cross-Channel finance.

McGuinness has had to deal with the damage caused by Brexit as COVID-19 restrictions, recently renewed due to the Omicron variant, have emptied its streets, endangering sandwich shops, bars and other services used by workers from the city.

“I really hope we can get people back to their offices soon, because for some of these businesses that have really struggled to survive over the past couple of years, this could be the last straw,” he said. she declared. –