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Brexit: The Perspective of International Banks

Brexit: The Perspective of International Banks

For years, major investment banks in the US, Switzerland and Japan have used the UK as a financial springboard to the EU. One of the main reasons for doing so is based on the ability to sell their services easily in 28 countries without having to obtain regulatory approval in each individual country. Thus, to reduce costs, banks have concentrated large chunks of global operations in the UK.

However, following the 23 June referendum, this structure could be shattered. The big international banks “have the most to lose” says Chris Bates, a partner at law firm Clifford Chance, which advises many banks on plans for Brexit. Faced with the prospect of spending billions of dollars to redesign their operations, banks are lobbying intensely against Brexit. For instance, US bank Goldman Sachs tops the list of these banks, with 90 per cent of its 6000 European employees based in London. For three years, the bank officials kept on warning the public about the negative consequences of leaving Britain in the EU. The bank even donated approximately $ 700,000 to groups that promote the negative consequences of Brexit. However, the bank has faith in a positive outcome for its beliefs as it moves forward with construction of its brand new European headquarters in London. The modernist building is scheduled to open its doors in 2019. But the new European headquarters of the bank could become more empty than occupied, whatsoever, if Britain will vote to leave the European Union.

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