UK Financial Services Firms continue moving jobs and assets to the EU, while calling on the Government to ensure the UK maintains a cooperative trading relationship with the bloc.
According to the latest data from the EY Financial Services Brexit Tracker, 43% (95 out of 222) of Financial Services Firms have publicly stated they have moved or plan to move some UK operations and/or staff from the UK to Europe, taking the total number of job relocations since the EU Referendum to almost 7,600, up from 7,500 in October 2020.
Twenty-four of the largest Financial Services Firms (ten banks, nine insurance providers, and five wealth and asset managers) have so far transferred or announced an intention to transfer assets out of the UK to Europe due to Brexit. Not all Firms have publicly declared the value of the assets that could be transferred but, of those that have, EY’s Financial Services Brexit Tracker estimates the figure to be almost £1.3 trillion, up from £1.2 trillion in October 2020.
Omar Ali, EMEIA Financial Services Managing Partner for Client Services at EY, comments: “Financial Services Firms across Europe have a number of chapters still to write before they can close the book on Brexit. After the major hurdle of standing up new EU hubs, the days of significant swathes of asset and job relocation announcements appear to have passed and will likely be replaced by the slower yet ongoing movement of people and assets to Europe for compliance purposes.
“UK and EU Firms are now awaiting the detail of the upcoming Memorandum of Understanding on Financial Services and will shortly face into a new round of Brexit discussions on the framework that will ultimately define the future relationship. The challenges remain significant, and, as recent headlines evidence, the push and pull of markets across Europe for business historically led from the UK continues.
“Such ongoing uncertainty poses the risk of fragmented markets, which is inefficient and costly for all Financial Services users and potentially damaging to the global competitiveness of both the UK and EU. Fragmentation of European financial services will serve to only benefit the US and Asia. But these challenges can be overcome if the right areas are prioritised – although passporting and equivalence debates command the headlines, there are arguably far more complex matters involving data, capital, skilled talent and frictional costs, that need to be settled.”