Skip to main content

While Britain debates the merits of a second Brexit referendum, London’s financial centre is steering clear of the argument, resigned to the need to shift some business elsewhere.

Burned by backing the ill-fated Remain campaign three years ago, major global and British banks said they would shy away from taking a similar position in a new vote, preferring to spend time and money on “future-proofing” their business, including tackling outdated technology and moving into new markets.

A Reuters survey of leadership attitudes at 17 British and global banks found just six of the 11 institutions who responded to the survey backed the idea of a People’s Vote to break a parliamentary impasse on a proposed exit deal.

Story continues below advertisement

Four banks said they opposed another vote while one lender said it would remain agnostic on all Brexit scenarios and would let the political process – now stretching toward its third year – run its course.

None of the 11 respondents said they would be prepared to put cash behind a campaign for either a “Leave” or “Remain” outcome at this stage.

To prepare for Brexit, banks have transferred billions of pounds in client assets to new European Union legal entities and shifted around 2,000 roles away from London to new hubs in cities including Dublin, Paris, Frankfurt and Madrid.

But now that the hard graft is complete, the industry biggest players say they would not reverse those changes even if Brexit was scrapped.

Spreading top talent across several European cities has enhanced the banks’ appeal to some EU clients and reduced costs linked to doing business in London, one of the world’s most expensive cities.

“The horse has bolted,” a source at one of the banks that responded to the survey said.

Britain’s opposition Labour Party has said it will support a second vote, but only if Prime Minister Theresa May refuses to change her withdrawal deal or if there is no new national election.

Story continues below advertisement

A second senior banking source said he believed the chances of a second referendum were on the rise, but he doubted it would garner anything like the same backing in finance industry circles as the first Remain campaign.

“I think we are still bruised by the experience the first time around. We don’t regret it, but we would have to ask ourselves why we would put ourselves through it again?”

JPMorgan Chase, Morgan Stanley, Goldman Sachs and Citigroup donated between £250,000 ($440,000) to £500,000 each to the Britain Stronger In Europe campaign in 2016, data from the Electoral Commission showed.

Lloyds Banking Group, Britain’s leading mortgage lender, also lent £20,000 to the Remain campaign at a 1-per-cent interest rate.

CRITICISM

Several key bankers including ex-Barclays chairman John McFarlane and Standard Chartered chief executive Bill Winters were among 1,280 business leaders who expressed support for the Remain campaign in a letter published a day before Britons went to the polls on June 23, 2016.

But the industry was accused of interfering in the political process and criticized for fuelling public fears about how Brexit might harm the economy.

Story continues below advertisement

The six banks that declined to take part in the survey cited company policy on political polls or differences of opinion in their leadership teams.

After losing the fight to secure passporting privileges, mutual recognition and enhanced equivalence regulatory regimes with the EU post-Brexit, a third senior banker said it was safer to reorganize their banks without political help.

“We would not endorse a second referendum. Why would we? What would be the point?” he said. “The financial sector planned for the worst possible scenario. I didn’t think that politicians would deliver anything for us and I’ve not been disappointed.”

Others said the government needed a better grasp of EU regulation and market structures that supported the industry’s status as Britain’s biggest taxpayer.

“Politicians should know their decisions have consequences and this kind of stress is the result,” a senior executive at a fourth major bank said. “I want to go back to not having the vote at all.”

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter