- Title: Bundesbank official: London will remain most important financial centre in Europe
- Date: 27th February 2017
- Summary: LONDON, ENGLAND, UK (FILE - 2015) (REUTERS) VARIOUS OF BUILDINGS IN CANARY WHARF
- Embargoed: 13th March 2017 15:41
- Keywords: Bundesbank Germany Europe EU financial district UK banks Brexit
- Location: LONDON, ENGLAND, UK
- City: LONDON, ENGLAND, UK
- Country: United Kingdom
- Topics: Economic Events
- Reuters ID: LVA00165AQMX9
- Aspect Ratio: 16:9
- Story Text: UK-based banks that want to operate across the European Union after Brexit must set up genuine operations, not 'empty shells' in EU countries, a Bundesbank official said on Monday (February 27).
Andreas Dombret, the Bundesbank board member responsible for supervision, warned banks not to try to trick regulators as they seek ways of preserving their access to the EU after Britain leaves in two years' time.
"Should a business or a bank be looking to move to Germany. We will not accept empty shells. We will not accept letter box companies. We will make sure that the management, the risk controlling etc is done out of Germany." Dombret said.
Under EU rules, banks licenced in one member state have 'passporting' rights to offer services across the entire bloc, but the chances of UK-based lenders retaining this access without shifting some operations from London are "dim", the German central banker said.
Dombret said banks in London would be deciding in the first half of this year whether to relocate some activities.
"I think that London as a financial centre is an eminent global financial centre. There are so many small, medium and large firms doing so many different activities. I expect London to remain the most important financial centre in Europe and for all the good reasons," he said.
Financial firms are the biggest tax contributor of any sector to UK government coffers. UBS and HSBC have said they could each move about 1,000 jobs out of London after Brexit.
Britain is set to formally trigger divorce talks with the EU next month, and UK policymakers say the EU should work with Britain to avoid undermining financial stability.
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