International banks threaten British Govt of stepping out from Britain within six months

London: International banks operating in London have threatened that if they do not get an appropriate clarification about Britain and it’s relationship with the EU post Brexit, then they would be constrained to exit London within 6 months. A few days back, Britain’s Finance Minister Philip Hammond had an important meeting with the Japanese financial institutions. Thereafter, Mr Hammond had admitted to such a warning being given by the Japanese international banks. Information of such warnings also being given by the Japanese financial institutions in a meeting with other ministers of the British Government have surfaced. It is said that prior to the Japanese banks, other prominent European banks along with the US banks had also threatened the British government.

Leading Japanese banks, Mitsubishi UFJ, Mizuho, Nomura, Daiwa have their offices in the British capital, London. More than five thousand people are said to be working in these banks. The transactions of Japanese banks carried out from Britain are vital due to their spread in Europe apart from that in Britain which is comparatively less. Reports of Japanese banks looking for alternatives have surfaced after the decision of BREXIT was taken in June. Misubishi UFJ, the largest Japanese bank has indicated towards a change in its location from London to Amsterdam and some of its employees have already been transferred.

However, even after six months from Britain’s decision to exit the EU, no important policy or decision with regards to any issue has turned up. Therefore, the companies operating from London, the center of international trade, are in a fix. The financial institutions have voiced their displeasure by saying that if the uncertainty regarding BREXIT is not resolved in the following months, there will be no alternative left for them but to leave London. The threatening ultimatum given by the Japanese banks is a part of this resolve.

Two months ago, the ‘British Bankers Association’, an apex organisation for the British banks has warned that the big banks in Europe have decided to relocate out of London even before the proposed talks on BREXIT planned in early 2017 could take place. It has been warned that this would lead to the British Economy bearing a loss to the extent of 20 billion pounds. The exiting banks may include prominent banks like HSBC, Standard Chartered, Barclays.

The new turn of events suggest that the ‘Single Market’could prove to be very significant for the British economy. The status of Britain’s capital, London as the ‘Financial Center’ plays a very crucial role. This alone contributes to 150 billion dollars to the economy according to a report. The international banks that operate in London can carry out their transactions in Europe without any disruption due to the ‘Single Market’ facility. A recent study predicts that if this facility is lost during the process of BREXIT, Britain would have to suffer a loss of 25 billion pounds at the start itself.