26 January 2021

Bloomberg: EU Turns the Screws on Bankers Clinging to Their London Desks

London financiers are discovering that warnings from the European Union over the cost of Brexit are more than tough talk.

Even the global pandemic’s fallout didn’t provide any wiggle room for the world’s largest interdealer broker, TP ICAP Plc.

The London-based firm said Monday it was prevented from serving all its EU clients because it hadn’t completed its planned relocation of staff to Paris. The company’s disclosure came hours before a Dutch member of the European Central Bank’s executive board emphasized the need for banks to ECB to Maintain Pressure on Banks to Build Out Post-Brexit Units" class="terminal-news-story" target="_blank">build out their units in the bloc.

“It is essential that we continue to push banks which have relocated to the euro area to allocate enough staff and assets to their new structures,” the ECB official, Frank Elderson, told the European Parliament.

The developments underscore the hard line taken by European regulators keen to compete for the crown jewel of the British economy, which was excluded from the Brexit trade negotiations. Brussels is determined to show the cost to leaving the world’s largest trading bloc and prise business away from the City of London. The U.K. relies on the industry for about a tenth of all tax receipts.

The realities of leaving the EU have “come home to roost” for Britain, EU’s financial services Commissioner Mairead McGuinness said on Bloomberg TV last week.

March Talks

Europe and the U.K. have yet to negotiate a deal for finance that would permit anything like the pre-Brexit status quo to function. Until then, assets and people are up for grabs. Talks slated for March center around a path forward for cooperation, and have mainly symbolic relevance, while any decision on equivalence is unlikely to come anytime soon....

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