“Banks have been working hard to design ‘Day 1’ operating models to ensure continuity of client service in the event of a hard Brexit. Although some banks may take the opportunity to restructure their European footprint more broadly, most are looking to minimize expense and disruption by relocating as little as possible in the first instance,” the report released Tuesday noted.

Over the medium term, however, pressures are likely to grow for banks to move beyond their initial ‘Day 1’ operating models,” it added. “These pressures are likely to lead wholesale banks to increase their presence inside the EU over time.”

The wholesale banking industry, which includes sales, trading and investment banking, accounts for 80,000 jobs in the U.K., according to Oliver Wyman estimates. The consultancy separately estimates that the wider financial services industry, including insurers and retail banks, will lose 31,000 to 35,000 jobs over the medium term.

The impact of such job losses would be striking, not just for the industry but the U.K. economy as a whole. The financial services industry is one of the largest contributors to U.K. gross domestic product (GDP), accounting for 22 percent of London’s GDP alone.

British Prime Minister Theresa May has been pushing for a so-called ‘hard Brexit‘, which would remove the U.K. from the single market and end the free movement of people. Finance minister Philip Hammond has proposed a ‘transition period’ of up to three years to help businesses navigate the new framework once Britain leaves the union.

However, the report insists that the financial services industry will not be able to wait until then to gain clarity.

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