Banks and other financial services companies in Britain have announced they are planning to move £1 trillion ($1.3 trillion) into the EU according to consultancy EY. Many banks have already set up new offices in Germany, France, Ireland and other EU countries in order to protect their regional business after Brexit is implemented.
Financial companies account for about 12% of UK economy and are ensuring jobs for 2.2 million people which will be lost after Brexit since many of these companies have already started moving assets in order to protect their clients from sudden changes that could accompany the rupture between Britain and its biggest trading partner.
The total number of jobs to be relocated out of the UK now stands at 7,000, according to EY, which estimates that this will cost the country at least £600 million ($794 million) in lost taxes. Andrea Enria, head of banking regulation at the European Central Bank said last month that the central bank expects about €1.2 trillion ($1.4 billion) of assets to be moved from Britain the the 19 EU countries that use the euro currency.
Britain was originally due to leave the European Union at the end of March, but the time was again extended for at least two more weeks even though Prime Minister Theresa May has asked the European Union to delay it until June 30. That would be enough time for financial services to be able to take the necessary steps to avoid a financial crisis as Omar Ali, head of UK financial services at EY, stated:
“No financial services businesses can know for sure how a disorderly Brexit will impact them, their clients, people and supply chains or, more broadly, the UK economy.”