Whilst Downing Street recently claimed that Theresa May remains confident in agreeing an exit deal with Brussels, UK Brexit Secretary David Davis is briefing the Cabinet for the possibility of leaving the EU without a deal. As the uncertainty of striking a deal with the EU intensifies, Hamidreza Ghanbari, CEO of Pilatus Bank, discusses the challenges and opportunities that the UK will have to endure post Brexit regardless of whether a trade deal with EU is agreed.
Dublin or Frankfurt could be the new London
Dublin with its shared language and similar laws and regulations to London, might appear as the natural choice for banks seeking new bases, but Frankfurt is so far predicted to be the principal winner in the relocation race to ensure continued access to the single market post Brexit. Despite other banks continuing to announce moving staff and parts of their operations out of the UK, Hamidreza Ghanbari, CEO of Pilatus Bank, believes that there are clear legal, operational and social advantages for banks to remain in the UK as opposed to relocating to other European jurisdictions.
Brexit has prompted a lot of uncertainty, especially in the financial services industry. Fearing that they no longer can serve clients within the EU from the UK and vice versa, a lot of banks will be forced to transfer a lot of their capital, liquidity, and operational structures to be able to cope with the so called “new normal”. Hamidreza Ghanbari adds that, “This will prove both complex and costly in the long run, but I’m confident the outcome will be promising for those who are committed to serving the UK market.”
Historically, the UK has faced many economic and political challenges. But Brexit is without debt the one that raises the most doubts within the UK population that actually voted in majority for the exit. “But obviously we voted without knowing the consequences. That is why a referendum is so dangerous,” says Steve Smith who is half irish and opting for using in the future his irish passport in order to stay in the UE.
But Brexit will not break with London’s reputation as a financial hub
Still the city of London remains one of the greatest financial capitals of the world. Ghanbari of Pilatus Bank states that, “I’m confident that history is going to repeat itself and that once the uncertainties have cleared, the UK will adapt, reinvent and rise above today’s challenges.” He further explains, “London was not created overnight. The mature legal and regulatory framework is admired by other countries. The cultural environment is welcoming to other races and ethnicities.” Hamidreza Ghanbari also points to the fact that in 2017 more than $1 Billion has been poured into the fintech companies in London, which is five times more than any other major European city. The CEO of Pilatus Bank concludes that, “Such level of commitment from global investors will certainly counter a lot of the uncertainties that Brexit currently poses.”