Times Photographer Richard Pohle
Bankers are far less likely to flee to Frankfurt or Paris now that a two-year Brexit transition deal looks likely between Westminster and Brussels, a City lawyer has predicted.
Nick Elwell-Sutton, a partner at the City law firm Clyde & Co, said: “With the political tide now flowing towards a two-year transition on passporting, I expect few bankers to elect a move to Europe in the short to medium term.”
Square Mile legal experts have also predicted that plans to scrap the bankers’ bonus cap after Britain leaves the EU will encourage financial sector high-earners to stay put in the City of London.
According to reports yesterday, regulators plan to scrap the cap on bonuses as part of a clear-out of unwanted financial rules.
Mark Carney, governor of the Bank of England, said that the bonus cap, which prevents bankers’ pocketing awards greater than twice their salary, would be at the top of the list of regulations to be ditched if the UK no longer had to comply with EU rules.
But the move would put Square Mile bankers in a difficult position as they would be forced to decide whether to transfer with those banks that moved some operations to Frankfurt, Paris or elsewhere in the union, where the limits on bonuses still apply. Alternatively, they could stay in London and be eligible for more attractive uncapped rewards.
Elwell-Sutton said that “since the financial crisis the banks have been wrapped in what many perceive to be Brussels red tape. A less strictly regulated financial sector could be very attractive for those that believe their pay cheque has been squeezed as a result of onerous EU legislation.”