Provided that politicians don’t erect walls to shut out the U.K., London’s financial sector is inventive enough to find a way around Brexit and remain integral to the European Union’s economy, said Barclays Plc Chief Executive Officer Jes Staley.
“So long as those barriers are not put up, there will be workarounds around Brexit so that London will remain a very important source of capital for continental Europe,” Staley said in a Bloomberg Television interview on Wednesday. “There will be uncertainty, but having been in the financial industry as long as I have, it’s amazing how creative it can be.”
On the issue of the impact Brexit will have on financial firms’ ability to service EU clients, Staley, 60, has consistently been among the most optimistic of bank executives. Increased cooperation since the financial crisis between major nations on avoiding such barriers has encouraged him even while he said Brexit talks could lead to decisions that restrict the flow of capital.
After continental politicians toughened their position on Brexit in the past month, the likelihood they will lose the automatic right to sell services freely around the region from London, known as passporting, is increasing, feels banks with European headquarters in the U.K. While diplomats have voted to exclude financial services from the main future trade agreement post-Brexit, EU chief negotiator Michel Barnier ruled out any immediate negotiations on a longer transition period, banks’ key demand.
Barclays is expecting to have to add only about 150 staff even as the bank has settled on Dublin for its expanded EU base.
On the other hand, while JPMorgan Chase & Co. and Deutsche Bank AG, have each warned as many as 4,000 of their U.K.-based jobs are at risk of being moved, HSBC Holdings Plc. is planning to move 1,000 investment bankers to Paris.
“We have a bank subsidiary in Ireland that is part of the EU, we have 1,200 staff in continental Europe from Milan to Paris to Frankfurt to Madrid,” Staley said in the interview. “Continuing to engage is important for us. The EU is going to require us to set up structures that make it more robust and more within the fold of Europe, and that’s OK.”
The CEO has said previously that as corporations put off investment and people delay buying houses or starting businesses, Barclays may be hurt by an economic slowdown in the U.K. “Openness,” “candor” and exchange of ideas with his bank and the financial services industry in general around Brexit expressed by U.K. Prime Minister Theresa May was praised by him.
“The level of dialogue with the Prime Minister’s office, with her government, with the chancellor, with the regulators has really been quite something; there’s a lot of listening on both sides,” he said. “We enjoy a very, very constructive dialogue with the British government.”
On the question about what outcome in the June British election would be best for his bank, Staley declined to comment. In recent opinion polls, May’s Conservatives are about 20 points ahead of Jeremy Corbyn’s Labour Party.
“I don’t want to insert myself as an American into British politics,” he said. “Obviously a strong economy is good for Barclays and certainty helps corporate investment, which is a fuel for growth.”
(Adapted from Bloomberg)