The chairman of the City watchdog has told financial services chiefs that it is preparing for “the hardest of hard Brexits”, reinforcing industry concerns that thousands of British jobs may be shifted abroad.
Sky News has learnt that John Griffith-Jones made the remark about the possibility of a ‘cliff-edge’ departure from the EU at a meeting of the advisory board of TheCityUK, the trade association, on Wednesday.
Mr Griffith-Jones, who is due to step down as the chairman of the Financial Conduct Authority (FCA) next year, gave a presentation on the regulator’s Brexit planning and stressed that it was taking action to prepare for every eventuality.
His comment about “the hardest of hard Brexits” went further than he or any other FCA official has gone publicly on the issue of the UK’s EU departure in 2019.
TheCityUK’s advisory council includes some of the financial services sector’s most influential figures, and is chaired by Paul Manduca, the chairman of Prudential.
Its members include the Barclays chairman John McFarlane; Bob Wigley, chairman of new trade association UK Finance; Bruce Carnegie-Brown, the recently appointed chairman of Lloyd’s of London; Catherine McGuinness, the new chair of the City of London Corporation’s policy and resources committee; and Mr Griffith-Jones himself.
The FCA is undertaking substantial volumes of work on the likely impact of Brexit, including in relation to the regime for overseeing credit ratings agencies, the new bank ring-fencing regime which comes into effect in 2019, and the supervision of investment services.
An FCA spokesperson said of Mr Griffith-Jones’s comment to TheCityUK meeting: “This is not inconsistent with what [FCA chief executive] Andrew Bailey said… last week.
“The FCA requires firms to be prepared for all manner of contingency situations.
“Brexit is no different and we are preparing for a range of possibilities.”
Mr Bailey said in a speech on July 6 that the watchdog wanted to preserve the greatest possible mutual access between the UK and EU-based financial sectors.
“Brexit does not need to lead to calling into question the fundamental principles of free trade and open markets,” he said.
“Brexit is undoubtedly a very big development, but it should sit within the overall scope of how to arrange the institutions of state to enable trade to happen while maintaining the public interest in stable, safe and fair financial services.”
However, Mr Griffith-Jones’s comment this week highlights the contrast between the approach of regulators in different sectors – which have little choice but to prepare for a ‘no deal’ Brexit – and that of ministers.
This week, Foreign Secretary Boris Johnson told MPs there was “no plan” for leaving the EU without a Brexit deal.
Industry bosses have also reiterated their warnings about a hard Brexit.
At a conference in Paris this week, Stuart Gulliver, the HSBC Holdings chief executive, repeated earlier statements that roughly 1,000 London-based jobs at the bank would move to the French capital.
Jamie Dimon, chairman and chief executive of JP Morgan, said European regulators would wield huge influence over the City’s future.
“If the EU determines over time that they want to move a lot more jobs out of London into the EU, they can simply dictate that,” he said.