Brexit: London's Lord Mayor confident Asian businesses will stay
SHOTARO TANI, Nikkei staff writer
TOKYO -- Britain's vote to leave the European Union has unnerved Asian businesses, especially those in the financial sector. Depending on the conditions of Brexit, the U.K. may lose its rights to financial services passporting, which allows financial institutions based in the U.K. access to the EU's single market. But Jeffrey Mountevans, Lord Mayor of the City of London, remains confident that the City will continue to be the leading financial center in Europe, and that Asian businesses will choose to stay in the capital.
"London is absolutely open for business, everything is continuing, we are putting considerable focus on how the future looks," Lord Mountevans, who is on a business trip around Asia, told the Nikkei Asian Review. "Yes, we are going into a negotiation, which will take time. But on the other hand, you have the certainties there of what London has to offer. If you start moving you could be throwing good money away."
Countries including France and Germany, which both have strong financial centers in Frankfurt and Paris, have been lobbying hard to convince businesses and financial institutions to move out of the City. While U.K. banks such as HSBC and Barclays have shown their preference to stay in the country, U.S. titans JPMorgan Chase and Goldman Sachs are said to be considering moving some operations to other countries, with Japanese banks also rumored to be reconsidering their presence in London as well.
But Lord Mountevans thinks replicating the breadth of services London offers will be hard for other cities. "The focus is on financial and professional business services in London. If you go to some of these other centers, there is no great focus on financial professional services to replicate that," he said. "The skills base, the experience in the City of London, is so deep and wide it is unique, and we are very well placed to provide those services. If you put it anywhere else it is going to be second-best."
Changes as opportunities
While the Lord Mayor said it is a "priority" for the U.K. to retain its passporting rights, he said it was "completely possible" that Britain will improve its position in terms of business conditions outside of the EU, because it is in London's DNA to constantly innovate and improve.
"In the last few years we [City of London Corporation] assisted the internationalization of the renminbi. We developed to be the leading Western hub for Islamic finance. We not so long ago decided that fintech is an important industry. It's now becoming possibly the world's leading hub for fintech," the Lord Mayor said. "With the change comes opportunity, and we can't sit here now and say in 2-3 years, what new things we will be doing in London. This stream of innovation is not going to stop."
"I'm confident, yes [of Asian businesses staying]. I can't say that nobody will leave but ... I see most ... staying there."