Barclays: City of London will be Europe’s ‘financial lungs’ despite Brexit
Speaking at the World Economic Forum in Davos, Jes Staley admitted to concerns about “transition periods” while Britain’s exit from the EU is negotiated, but said London will fend off attacks from Frankfurt and Paris.
“I don’t believe the financial centre of Europe will leave the City of London,” he told the BBC. “There are all sorts of reasons why I think the UK will continue to be the financial lungs for Europe.”
He added that with the US and the UK economies doing well, there is reason for optimism: “A political crisis doesn’t necessarily translate quickly into an economic crisis.”
Staley added: “We’re going to have to make an adjustment to the Brexit move, but it’s going to be one that will be manageable for Barclays, and will not threaten… London as a centre of finance for Europe, and will not threaten the activities of Barclays in London. We are a British bank and are committed to the United Kingdom.”
On overtures from foreign cities, he said: “It’s very interesting that one minute no one wants bankers in their backyard, the next they are inviting you over to a barbecue.”
Chancellor of the Exchequer, Philip Hammond, said on Thursday that financial services will be a “priority” for the Government in its Brexit negotiations. “Six months from now we’ll have a much clearer idea of where we collectively feel we can go,” Hammond said, noting that “a huge proportion of Europe’s financial transactions pass through the City of London.”
It emerged that Goldman Sachs is considering moving 1000 bankers to Frankfurt and some back-office staff to Warsaw. Lloyds is likely to pick Frankfurt as a base for the 3% of its business that is outside the UK.
Barclays chairman John McFarlane said passporting rights were key to negotiations.
“We want a standstill arrangement for three years, that would kick in after the Government’s negotiations on Brexit are finished,” he added.
With Wall Street expecting a loosening of regulation under President Trump, Staley backed the Dodd-Frank regulation separating the big banks’ trading and retail arms.
He noted that Barclays investment banking arm has lately performed well, but suggested a lid will be kept on bonuses.
“We need to generate a fair return for shareholders, and need to compensate our people for performance. You know, if we go back to the days of using money to attract talent, I think that’s very bad for the culture of the company.”
