UK is now faced with some of the central banks actually moving their banks from London to other areas. The automatic right that the United Kingdom has to trade with the European Union would cease when they leave the single market. The German banking declared that with a “hard Brexit” that valuable “passport rights” would no longer give unfettered access to the bloc.
Brexit effects other European Nations
London has a vital position as a financial hub across Europe which makes it a harsh reality if their Passport rights were stopped. There would be many countries without the ability to serve their clients. Licenses would have to be enacted in many of the countries for England to be able to do banking business it is feared. However, the foreign secretary Boris Johnson has claimed that such rights would be preserved even if Britain left the single market after Brexit.
New Location Headquarters
It is claimed that the Brexit would not affect Britain and they can remain in the single market. Other nations are looking for a new location to set up shop. The fact is according to Mr. Weidmann that passport rights are “tied to the single market and would automatically cease to apply if Great Britain is no longer at least part of the European Economic Area.” Since this is a factor that might happen other businesses are considering a new place to go. One of the most attractive places at the present time is in Frankfort, Germany. While Frankfurt seems to be an attractive place to go for newcomers Britain is not afraid of a mass exodus from London. The British still is the financial hub of banking for European nations even with their declaration of the Brexit.
The fear that Britain will lose its trade rights in the European Union is not very likely since the UK has the majority of the financial systems located in London. The United States is still behind Great Britain giving them even stronger hold. It will take a few years before they get up to speed but the British feel that it will be worth it. Some of the nations within the United Kingdom do not share the same sentiment but know that the best recourse is sticking together as the United Kingdom. Along some of the countries that are part of the UK could not survive financially.
The BBC interview with the foreign Secretary Boris Johnson gave insight to how the United Kingdom planned on sticking with their Brexit decision and still maintaining a strong hold on the financial hub that they already maintain in London. The PM has faith that in the end, the securities will remain in tack and the UK will be stronger than ever. Trade with the EU will remain solid but some new licensing may have to be acquired for all the nations to have passports rights. Mr. Weidmann says these rights are needed to keep nations in the single market. Britain is fully aware of the consequences and ready to face the future.
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