Friday, December 3

City of London finance chief warns against no-deal Brexit


City of London Corporation’s Chair of the Policy and Resources Committee, Catherine McGuinness, poses for a photograph following an interview at the Guildhall in the City of London on January 7. — AFP photo

LONDON: Britain must avoid a no-deal Brexit, a senior City of London official urged, warning that a chaotic departure could spark markets chaos and cost up to 12,000 financial jobs.

The capital’s business community is anxiously awaiting next week’s crucial parliamentary vote on British Prime Minister Theresa May’s unpopular Brexit deal – fearful that defeat could potentially send Britain crashing out of the European Union without an agreement with Brussels in place.

The clock is ticking down to Brexit on March 29, when Britain, the world’s fifth-biggest economy, divorces from its main trading partner.

“What do we expect next week? I think, given the current political uncertainty, it is very hard to say,” said Catherine McGuinness, policy chairman of the City of London Corporation.

“It is clear that Mrs May’s deal is not going to get an easy ride,” she told AFP in an interview.

“That is one of the reasons why we are very focused on the risks of a no-deal scenario, which we think would be bad for consumers and businesses in the UK and the EU.”

Questioned about whether the risks of a so-called “no-deal Brexit” are growing, she replied:

“I think one has to say that in the current political uncertainty.

“So, it’s important that regulators and institutions take every step they can to avoid unnecessary turmoil.”

McGuinness, whose institution oversees the finance-heavy Square Mile district, added she has found concern across the world over the knock-on impact of a disorderly Brexit.

“We will certainly see some volatility in markets but what I am really concerned about is anything which stops markets operating smoothly and which may have unforeseen consequences or adverse implications.

She said she was particularly concerned about “systemic risks – if there is something which means that institutions have to move large volumes of money or transactions unexpectedly, which might have ripple effects.”

“This is not something which just the UK is worrying about, but beyond the EU when I go to America, when I go to other parts of the world, regulators talk to me about the concerns that they have – that there may be implications.

“It is only ten years since the financial crisis. The last thing they want is anything which impacts adversely on markets.”

McGuinness meanwhile repeated her recent assertion that between 3,000 and 12,000 financial sector jobs could be lost due to Brexit.

“Clearly what Brexit means for the long term is going to take some time to work through,” she added.

“We are not expecting a massive exodus of jobs because the business that is carried on here in London is much wider than simply our EU-facing business.

“Apart from that, of course we’re going to remain strong trading partners with the EU whatever happens”. — AFP