Banks looking to move from Britain to the euro zone after Brexit may be given an expedited entry, with supervisors willing to spare them from a lengthy initial test of their risk models, a top European Central Bank official said on Wednesday. David Pollard reports.
It's a familiar financial landscape - but one Brexit could change if London loses its UK-based banks to Frankfurt, Paris or Dublin. And sooner than some expect - if the ECB gives them fast-track approval. The possibility of a helping hand to speed things up was confirmed by ECB board member Sabine Lautenschlaeger. She told bank executives that - instead of a review process that can take months - the ECB could apply a temporary waiver. So long as the banks' risk models had already been approved - in Britain .... As competition for business heats up. (SOUNDBITE) (English) CIBC, HEAD OF FX STRATEGY, JEREMY STRETCH, SAYING: "Companies within the City of London looking for contingency measures will be looking at the easiest and cheapest way to facilitate operations within the euro zone if the UK is pursuing a hard Brexit, and at the same time the European authorities want to maintain and attract business. There is certainly a degree of regulatory arbitrage, perhaps, being seen between various jurisdictions." Goldman Sachs confirmed on Tuesday it's to move hundreds of people out of London. Britain due to press the trigger on divorce proceedings on March 29th. Insurer AIG has also announced plans - UBS and HSBC are among others to talk of moving jobs. (SOUNDBITE) (English) CIBC, HEAD OF FX STRATEGY, JEREMY STRETCH, SAYING: "We've had some of these companies starting to make announcements ... I think we will continue to see companies across a number of industries announcing and revealing more contingency plans as we go further into the exit negotiation process." But there would also be conditions. Lautenschlaeger listing adequate local risk management, sufficient local staff and operational independence as key criteria. The ECB unwilling, she said, to accept empty shell companies.