According to a comprehensive report by Worldway Immigration: On August 19, as the UK contemplated leaving the European Union, US banks that use the UK as their European business base expressed concern. According to a report by the Financial Times on the 19th, sources familiar with Bank of America, Citigroup, and Morgan Stanley indicated that several Wall Street banks have begun preparing contingency plans, with an initial plan to relocate their current UK business bases to Ireland, though these plans are still in the "preliminary stage."
The report points out that many US and Asian banks currently choose to set up their European headquarters in the UK, which grants them automatic passporting rights—allowing them to provide services to all 28 EU member states.
Senior US banking executives point out that once the UK leaves the EU, these "rights" are likely to disappear, significantly reducing the UK's appeal as a financial hub. Data shows that more than 250 foreign banks entered the UK last year, bringing the country a financial trade surplus of as much as $71 billion.
The report states that the Eurozone is currently planning to establish a banking union, with the European Central Bank supervising all large banks in the region, and many fear this will leave the UK more isolated. British Prime Minister David Cameron has promised that if the ruling Conservative Party wins next May's general election, a referendum on EU membership will be held.
The report notes that most observers previously believed that if the UK were to leave the EU, Frankfurt or Paris would be the most likely candidates to host the European operations that US banks might relocate from the UK.
However, banking industry insiders point out that Ireland is more attractive to US banks due to factors including low corporate tax rates, an English-speaking population, a common law legal system, and its status as a Eurozone member state.
Worldway Immigration Editor
