British Prime Minister Theresa May announced recently that as soon as March 2017 she would invoke the Article 50 and consequently start the 2-year process to leave the European Union (EU) after a referendum vote in favor of the Brexit that took place on June 23, 2016.
According to French Finance Minister Michel Sapin, US banks will move some activities out of the United Kingdom (UK) to other European countries as a result. “It’s no longer ‘will there be’ or ‘if’ there’s a Brexit. It’s ‘there will be a Brexit in two years and after two years we will have to take decisions’,” Sapin told a news conference in Paris, France’s capital city that hopes to attract Banks moving out of London.
In fact, that is more May’s stance that could influence the US banks’ decision than the Brexit itself. The “version” of the Brexit that the British government is willing to choose will be instrumental in what financial institutions will decide in the upcoming months as for their presence in the City.
Now that a “Hard Brexit” seems plausible, meaning reducing immigration over retaining access to EU’s single market, the future of London as Europe’s financial center may be questioned for real unless May opts for counterbalancing the Hard Brexit with Singapore-like tax rates.