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Brexit: Visa could move jobs to continent, LSE-Deutsche Bourse London HQ at risk

29 June 2016  |  9386 views  |  1 Euro Coin Cash

The Brexit fallout continues, with concerns rising that Visa might move hundreds of jobs out of the UK, the London Stock Exchange's merger with Deutsche Bourse could be hampered, and the City's role running euro clearing is under threat.

As the financial services sector scrambles to digest the implications of last week's referendum result, which saw the British people vote to leave the European Union, jobs and business are at risk.

According to Sky News, Visa may relocate hundreds of positions to the continent because of a clause in the recent multi-billion dollar acquisition of Visa Europe, which insists that transaction data does not leave Europe.

Citing sources, Sky says that German regulators are likely to push for Visa's UK-based data centre operations to be moved to an EU country.

A Visa spokesperson told Sky: "While we continue to monitor the situation carefully, it is premature to speculate on whether possible changes to the location of our data centres would make sense or be required."

Several big banks - including Citi and Goldman Sachs - have already warned that they will move jobs to other EU cities if the UK does not get access to the single market's passporting regime.

Another potential Brexit casualty is the plan for a London headquartered post-merger LSE-Deutsche Bourse. Felix Hufeld, boss of German regulator Bafin, says that "it is hard to imagine that the most important exchange venue in the eurozone would be steered from a headquarters outside the EU...There certainly has to be an adjustment here."

Hufeld also says that euro-based trading could go through Frankfurt, which could also soon be home to the European Banking Authority, which will have to move its base from London because of Brexit.

French President Francois Hollande has also stepped into the euro clearing debate, saying: "The City, which could handle clearing operations in euros thanks to the UK’s presence in the EU, won’t be able to do them any more."

Last year the European Central Bank lost a court case that tried to bring clearing under its regulatory control by shifting it from London to a euro-area country. However, the Brexit vote may change the landscape.

Industry veteran Hirander Misra has told Bloomberg: "Clearing is very much cross border and also depends on confidence in the clearinghouse. That said, there’s nothing stopping EU authorities from putting in pseudo barriers to entry."

Comments: (1)

A Finextra member
A Finextra member | 30 June, 2016, 11:42

On the bright side, post exodus, it will be much easier to get theatre and concert tickets in London :-)

Much, much easier to get lunch reservations in decent City restaurants :-)

Frankfurt will become a much more interesting city than it is already? :-D and Eurostar and City Airport will do a roaring trade :->

Having spent 2008/2009 in dubai during the  crash and going back today to see a bullish economy, it remains clear that the only real constant is change!  This is not a bad thing! Can we embrace change and do well  or should we talk ourselves into recession/depression? 

Getting tired of gloom so Positive Mental Attitude gets my vote today....  If we can see past the immediate uncertainty, I believe we can be fairly certain that our politicians will find the will to make the best of this opportunity to re-calibrate the EU and UK for the challenges ahead!  Of course not so hidden agendas will now be front and centre- but as the article above points out- EU clearing was already being claimed by the EU and why not!!!!  To Citi, Borse,  Goldman and Visa staff I say..  viel glück und viel segen -

Of course the moves may never happen!

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