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City chief plays down Brexit risk as banks move jobs

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The City of London's policy chief played down Brexit risks for the world's top financial hub in an interview with AFP on Friday, even after a string of banks said they may have to shift jobs from London.

[LONDON] The City of London's policy chief played down Brexit risks for the world's top financial hub in an interview with AFP on Friday, even after a string of banks said they may have to shift jobs from London.

"Brexit won't be... so damaging as to risk London's status," Mark Boleat said, while acknowledging there would be "a loss of tax revenue and... a loss of jobs" as Britain prepares to leave the European Union.

"I am sure London will be the leading global financial centre whether Britain is in the European Union or not. There are many assets that London has that no other centre has," he said.

Mr Boleat, policy chairman of the City of London Corporation - the Square Mile's local authority - made his remarks after Prime Minister Theresa May unveiled her historic Brexit blueprint on Tuesday.

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"Corporates come from all parts of the EU, whether it is to hedge their currency risks, to insure, to raise money on the bond market or the equities market."

"They also use other centres in the EU - that's the benefit of having a single market. London is by far the largest. That is something that not only British negotiators will be conscious of; so will the European negotiators".

Fragmenting the City - which serves all of the EU - would strengthen rival finance hubs outside Europe.

"There will be no wish in the EU to do things that would damage the rest of the EU."

"Fragmenting the financial centre that currently is based in London is not going to benefit anybody in Europe; it may benefit people like New York, Singapore, and Hong Kong."

Ever since Britain's June 23 referendum to quit the EU, speculation has been rife that other hubs - particularly in the eurozone - would battle to win precious market share.

The finance sector argued in the run-up to the shock vote that Brexit would spark major City job losses.

Mr Boleat himself was a powerful supporter of the "Remain" campaign, as was the City of London Corporation.

It emerged at Davos this week that top-flight banks - including Goldman Sachs, HSBC, JP Morgan and UBS - could shift thousands of London jobs to elsewhere in Europe.

Mr Boleat however shrugged off the news.

"They are not moving all of their people; they are not closing down in London, but they are preparing to move part of their business to other centres in the EU where they will need to have authorisation somewhere that is other than the United Kingdom," he told AFP.

Research consultancy Oliver Wyman suggested Brexit could lead to as few as 2,000 London job losses to elsewhere - but as many as 35,000 in a worst case scenario.

"It's very difficult to say how many jobs are going to move away from London as a result of Brexit," Mr Boleat said.

"A lot depends on the deal that is done between Britain and the European Union - and then on what the British government does in respect of its policies generally to keep business in London."

The City employs some 164,000 people, according to 2015 data, while two million work in Britain's financial services sector.

The loss of single market access and passporting rights - which allows for trading across the entire EU - remains key.

Mrs May vowed Tuesday that Britain would quit the common market in order to control EU immigration - but would seek new trade deals with the EU and beyond.

"There's a chance of a good Brexit deal. There's a chance it might not be good, and business is prepared for everything," Mr Boleat said Friday.

"What we really want ... is continued access to the European markets from Britain, and continued access to the British market from the EU."

Mr Boleat sounded a diplomatic tone about other hubs - such as Dublin, Frankfurt and Paris - drumming up business.

"It's perfectly reasonable that other European cities are trying to attract business from London. It's what we would be doing in the same circumstance."

AFP

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