You may delay, but time will not. Although more than a year has passed since Britain voted to depart the European Union, banks that are tempted to leave London for the Continent have been curiously reluctant to make concrete plans. And their hesitation, critics say, isn’t good for business.
“The banks have to finally get their act together, otherwise they won’t make it before Brexit happens at the end of March 2019,” a high-ranking regulator, who wished to remain anonymous, told Handelsblatt. “The decisions must be made now.” Financial institutions need to allow enough time to hire employees and get their IT systems running smoothly, the source said.
A member of the European Central Bank’s executive board, Sabine Lautenschläger, made similar comments last week. “I have a very clear message for banks both small and large: The clock is ticking,” she said. These institutions “still haven’t made as much progress as we’d like,” Ms. Lautenschläger added.
With the outcome of the UK’s negotiations with the EU still unclear, Ms. Lautenschläger advised banks to prepare for a hard Brexit – meaning no trade agreement, no special exceptions and no transitional rules for British firms and organizations. To continue to do business in the European Union, from 2019 the UK’s financial institutions will need to hold a banking license in at least one of the trading bloc’s other 27 countries.
While some banks have inched their plans forward, it’s time for the big bosses to shed their reluctance and take decisive action, the ECB board member added. “We haven’t seen a lot of final decisions there on how these and other banks are looking to organize their businesses,” Ms. Lautenschläger said.