"American banks JP Morgan and Morgan Stanley are able to sell to the rest of Europe from London under special "passporting" arrangements. Even before the negotiations with the EU begin, both have said they may need to move staff to the EU to serve their European customers. JP Morgan alone has warned up to 4,000 jobs could leave the UK.
Airbus employs 15,000 people in the UK and chief executive Tom Enders said. "This is a lose-lose result for both Britain and Europe. We will review our UK investment strategy, like everybody else will."
London will give up its position as "world financial capital," I would think. That always seemed a bit odd, and now that they're losing one of their main advantages...
They are gaining one! Swiss banking privacy rules down under EU pressure. The UK now have freedom to keep large money more private than Swiss can do from now.
That's exactly opposite of what the United States has been pushing for the last couple of decades in terms of banking secrecy, pretty successfully. The U.K. could alienate the US government right now, but I bet they won't.
Switzerland already bent its traditional legislation to comply with new EU ruling about banks secrets snd reporting. The UK banking just got its chance.
Switzerland did that because the alternative was, concretely, losing the ability to keep foreign customers, so they chose the lesser evil.
Why do you think it would be different for the UK?
London was the de facto capital (as in, economic powerhouse) of the EU, where you'd create your EU headquarters for its connection to the EU, its most talented individuals, its market, and to some extent its political connections.
This will no longer be true. No longer will you have automatic access to the rest of the market, no longer can talent so easily flow, no longer does the UK hold a 10% vote in the EU, no longer will it carry the image of being the capital of the EU by definition of it being outside of the EU. Many of the incentives to incorporate in London will shift to other destinations.
And that'll surely have repercussions, I won't use terms like full on collapse or anything like it, but I expect consequences will be quite substantial.
Thanks for clarifying it in a way that's perhaps a little less hyperbolic than my "full on collapse." I think it's important to understand the passporting agreements between banks in the UK that allowed them to essentially act as if they were banks in the EU created a ton of prosperity over the last several decades (2.1 million jobs in finance alone in the UK).
This industry is going to take a huge hit, and frankly, even if you don't work in finance, you should care because it will impact everyone in the country.
"UK banking stocks have plunged after Britain voted to leave the EU.
Barclays and RBS were among the hardest hit, with their shares sliding nearly 30% at the start of trading before staging a partial recovery.
Meanwhile, Morgan Stanley could relocate up to 2,000 London-based investment banking staff, the BBC understands.
This could add to fears about potential job losses in the UK financial industry, which employs 2.2m people.
Shares in the FTSE 100's five big banks fell 21% on average as markets digested the results of the referendum, with Barclays suffering the biggest one-day fall in its share price. The price eventually recovered to stand 16% down in late afternoon trading.
Shares in Europe's other main banks fell heavily, with Germany's Deutsche Bank down more than 13% and France's Societe Generale more than 20% lower.
"The UK and European banking system has been hit particularly hard as there was already fears about their health, and now there are worries about the linkages between European and British banks," said Michael Hewson, chief market analyst at CMC Markets."
Hyperbole much? Stop with the fear mongering.
Also, which "large companies" have announced they are moving? Source?