The threat that British banks would lose their “passporting rights” after Brexit have been overstated, a specialist lawyer has claimed.
Michel Barnier, the EU’s chief Brexit negotiator, told reporters in Brussels on Monday: “The legal consequence of Brexit is that the UK financial service providers lose their EU passport. This passport allows them to offer their services to a market of 500 million consumers and 22 million businesses.”
However, Ian Borman, a partner at the City of London office of the US law firm Winston & Strawn, said that the EU position was predictable and not as significant as some might assume. “The practical significance of this can be overstated,” he said.
“The fact that financial institutions, faced with the worst possible type of Brexit, are not making more significant moves and are still investing in London, albeit cautiously, tends to support the view that the absence of a passport will reduce the number of people employed here.”
However, he went on to say that “it remains to be seen whether Brexit will cause the absence of passporting for EU regulated entities into the UK, which may reduce competition in the UK financial market and benefit UK regulated entities”.