London is likely to lose its status as the “gateway to Europe” for some financial services as a result of Brexit, according to one of Germany’s most senior banking regulators.
Dr Andreas Dombret, executive board member for the Bundesbank, said he expected many UK-based firms to move at least parts of their operations to the EU, undermining the standing of the City and Canary Wharf as the pre-eminent financial centre in the global economy.
The BBC relayed the private comments of Dr Dombret, who reportedly said that any interim or makeshift arrangements were unlikely to compensate for the loss of “passporting” rights.
Already banks such as HSBC have made advanced plans to move hundreds of staff into EU countries to maintain links.
Dr Dombret said: “Let me say that I expect London to remain an important financial centre.
“Nevertheless, I also expect many UK-based market participants to move at least some business units to the EU in order to hedge against all possible outcomes of the negotiations.”
Berlin Stock Exchange chief executive Artur Fischer, also told the BBC it was “very, very likely” that the City of London would lose its gateway status as part of a hard Brexit.
Mr Fischer told the Today programme : “If as a result we end up without a single market participation, without customs union participation, for the UK in Europe, then there is no other choice than that the gateway function will be moved somewhere else in the EU. That is a logical consequence.
“We just all hope that we will find some middle ground whereby we can avoid that.”