The EU is preparing to move
its European Banking Authority from London following Britain's vote to leave
the Union, EU officials said on Sunday, setting up a race led by Paris and
Frankfurt to host the regulator.
Coming a day after Britain's
Jonathan Hill resigned and was replaced as EU financial services chief by the
Commission's "Mr. Euro" Valdis Dombrovskis, the move underlines how
the City of London can expect to be frozen out of EU financial regulation --
and possibly from Europe's capital markets -- depending on the terms of Brexit.
While those who argued for
Britain to leave the EU said the financial industry would thrive without EU
shackles, some of its biggest employers including JPMorgan are scouring Europe
to find new locations for their traders, bankers and financial licenses.
The EBA, whose 159 London
employees write and coordinate banking rules across the bloc, is expected to be
relocated "soon", two EU officials told Reuters.
All European Union agencies
are based in member states. EBA chairman Andrea Enria said before Thursday's
referendum that the watchdog, founded in 2011 to improve regulation after the
global financial crisis, would have to move if Britain chose to leave.
An EBA spokeswoman said on
Sunday that the European Union will have to decide on relocation and in the
meantime the agency would continue to operate in London.
Other European capitals are
keen for a slice of Britain's financial services industry which contributed 190
billion pounds ($280 billion) to the economy in 2014, roughly 12 percent of
economic output. Ireland said on Friday it had been in touch with firms
considering relocating.
The industry employs 2.2
million people in Britain including around 90 percent of U.S. investment banks'
European staff and 78 percent of capital markets activity by the other 27
members of the EU taking place in the UK.
Paris and Frankfurt are the
two largest financial centres on the continent and are therefore seen as the
most likely new locations for the EBA.
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