Barclays’s Jes Staley said the UK’s departure from the European Union will prove to be a net benefit for the City of London.
While some jobs and assets have shifted to the bloc, the chief executive officer said in an interview with the BBC that the ability of the finance industry to set its own agenda would better enable it to compete with Asian and American financial hubs.
“What London needs to be focused on is not Frankfurt or not Paris,” Staley said. It “needs to be focused on New York and Singapore.”
He said that while the UK should work to maintain good relations with the EU, its future prospects will hinge on its ability to attract global capital and become a hub for areas like green finance.
The finance industry is a central pillar of the UK economy, generating about 7 per cent of economic output and employing 1.1 million people.
Staley’s upbeat message comes after the sector was largely ignored by the trade deal struck by the UK before Brexit took effect on December 31st.
That’s accelerated the erosion of London’s longstanding strengths as Europe’s predominant financial centre, including most share trading in European shares shifting into the bloc.
But the impact for Barclays, so far at least, has been limited.
“There are some jobs that are going to Europe, that otherwise would have been in the UK, but it’s in the hundreds,” Staley said. “Some amount of capital has moved but London is still obviously the main centre for Barclays.”
Staley also said that deregulation wasn’t the answer to maintaining London’s competitiveness as a global financial centre.
Regulation “protects the financial industry” and “makes the bank safer,” he said. “I wouldn’t burn one piece of regulation.”
Barclays Irish unit’s assets soared almost 450 per cent last year to €69 billion as it became the bank’s European Union hub in preparation for Brexit, with the balance sheet growth driven largely by financial derivatives.
Barclays said in 2018 that it expected Barclays Bank Ireland to ultimately hold £224 billion (€255bn) of assets as the unit is used as a hub to maintain access to clients across the EU after Brexit.
The planned scale of the Irish operation will make it the biggest bank in the Republic by balance sheet size, and has brought it under the direct supervision of the European Central Bank. – Bloomberg
