HSBC and Barclays, two of Britain's biggest high-street banks, have confirmed they will remain in the UK even after the country voted to leave the European Union in the historic referendum of 23 June 2016. Douglas Flint, chairman of HSBC, said London would remain the centre of the financial world despite Britain's impending exit from the EU.
"This is still the foreign exchange capital of currencies that have nothing to do with Europe," he told an audience at an event organised by lobby group TheCityUK.
"The major trading currency in the world today is the dollar."
Economists have warned that Britain's vote to leave the EU could see major European banks swap London for Dublin and Frankfurt, but Flint remained adamant the City would continue to thrive even outside of what would become the 27-country bloc.
"The market will go where liquidity, the legal system, the expertise, the cluster is," he added.
HSBC, which earlier this year had considered relocating to Hong Kong, warned before the referendum that approximately 1,000 jobs could move from London to Paris, where the bank also has a major presence. However, Flint said the pro-Brexit vote would not change the lender's hiring plans "to any meaningful degree", adding that he was in favour of full access to the single market to ensure trade would not suffer following the vote.
Flint's words were echoed by his Barclays counterpart, Jes Staley, who said Barclays hoped to "stay connected to the European capital markets" and warned against any plans to "build protectionist walls in the financial industry". Staley said that while the referendum might open up new jobs in Europe, it would not translate into redundancies in Britain.
On Tuesday (28 June), Moody's Investor Service lowered its outlook for 12 UK banks and building societies and downgraded the outlook on Britain's banking system from 'stable' to 'negative' in the wake of the EU vote.
"We expect lower economic growth and heightened uncertainty over the UK's future trade relationship with the EU to lead to reduced demand for credit, higher credit losses and more volatile wholesale funding conditions for UK financial institutions," said Laurie Mayers, associate managing director at Moody's.