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Will banks eye Ireland if UK exits EU?

Wednesday, August 20, 2014 - 02:02

Wall Street banks are reportedly drawing up preliminary plans to move some of their London-based activities to Ireland if the UK drifts further apart from the EU. Ciara Lee asks if that's a realistic possibility.

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We've had the threat of a Grexit and now it's the Brexit causing a stir. So what would happen to global banking if the UK were to leave the EU? According to reports US lenders are already making plans. They apparently include moving some of their London-based operations to Ireland. Brian Caplen is Editor of The Banker. (SOUNDBITE) (English) BRIAN CAPLEN, EDITOR OF THE BANKER, SAYING: "It may well be they decide they want to shift some of the stuff there that needs to be inside the euro zone. But I don't think it will be like a euro sum game. I think there would be other activities that might be better suited to London, so I just think there will be a restructuring." Citigroup, Morgan Stanley and Bank of America are among those reportedly in the early stages of planning. They declined to comment on the reports. CIARA LEE PTC London has long been the main financial hub for overseas banks in Europe, giving them easy access to business across the continent. But as the ECB prepares to take over the regulation of Europe's biggest banks, many fear a wedge has already been placed between the UK and the rest of Europe. British Prime Minister David Cameron will hold a referendum on EU membership if his Conservative party is re-elected next year. And the prospect of the world's sixth-largest economy quitting the club it joined 60 years ago is worrying many in the city of London. Financial services account for a tenth of the British economy. But surviving outside the EU might not be so bad. (SOUNDBITE) (English) BRIAN CAPLEN, EDITOR OF THE BANKER, SAYING: "London grew up as an offshore centre. The euro bond and the euro dollar are offshore instruments, and we might see a resurgance of something like that. Especially if the European Authorities become too restrictive." Paris and Frankfurt may be a more obvious alternative for the banks. But with its English speaking population, low corporate tax and UK-style legal system, Ireland could fit the bill. It's already attracted many big companies and is recovering well after its euro zone bailout. New York's love of all things Irish is also well known. Maybe Wall Street will soon be looking fondly at the emerald isle for business reasons too.

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Will banks eye Ireland if UK exits EU?

Wednesday, August 20, 2014 - 02:02