BoE's Woods warns Brexit transition deal needs to happen by Christmas
Deputy governor says banks will shift jobs if no agreement reached
Banks would start to move out of the UK if a Brexit transition deal was not agreed by Christmas, a Bank of England deputy governor warned.
Sam Woods said firms would “start discounting the likelihood of a transition in the central case of their planning”.
“If we get to Christmas and the negotiations have not reached any agreement on this topic, diminishing marginal returns will kick in,” he said in a speech.
He added that “bringing up the borders in wholesale finance would be regrettable for all sides, be they the home or host of international groups”.
“Contingency planning is a sliding scale of increased commitment, investment and momentum through time. It much more prudent and prosaic than hovering over the relocate button or rushing to the exit door,” he said.
“But re-structuring by firms will in general increase their complexity. I struggle to see an outcome in which banks and insurers do not get harder to supervise and harder to resolve for all involved.”