Thursday 20 October 2016 9:53 am

BBA chief calls for clarity for banks on Brexit to prevent “worst case scenario” planning

The head of a leading City trade group has called on government to provide more clarity on its Brexit thinking for the sake of the future of the banking sector.

Speaking at the British Bankers' Association's International Banking Conference, chief executive Anthony Browne said "banks need as much clarity as possible" so they could carry out plans with certainty, adding: "International banking is more affected by Brexit than any other area".

Browne also called for market access to the EU to be retained for the financial services sector, remarking it was crucial not to "split (that market) in two by building a wall across the Channel".

He reiterated calls to retain passporting, noting the often cited alternative of equivalence was a "poor shadow to genuine passporting", and added the industry would also need some sort of transition period.

"International banks are all planning for the worst case scenario," Browne commented. "They have no other choice."

Browne noted the referendum result would cast a shadow over business for some time to come, adding: "Brexit will continue to dominate the headlines for the foreseeable future."

However, although the BBA chief acknowledged that Brexit was not exactly a positive for the banking sector, he also noted that lenders were in a much more stable position than they were in 2008, thanks to regulatory changes made in response to the financial crisis.

Browne's comments come at a time when many in the industry are becoming increasingly concerned that government is leaning towards a so-called hard Brexit, which would most likely involve the withdrawal of passporting.

Earlier this week, a number of key industry figures revealed banks were scoping out alternatives to London, namely Frankfurt, as their contingency plans continued to take shape.

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