London mayor warns Asia, NY will win out from Brexit

Sadiq Khan says so-called hard Brexit could be a lose-lose, a lose for London and the UK, and a lose for the EU too

DAVOS, SWITZERLAND: The ultimate winners of banks deserting Brexit-bound London will not be rival financial hubs in Europe but New York and Asia, the British capital's mayor warned Thursday.

Sadiq Khan spoke to AFP at the World Economic Forum (WEF) shortly after Prime Minister Theresa May told the meeting in Davos that Britain would remain open for business, even as some banks start shifting jobs from London to Europe.

While May insists that Britain will abandon the EU's common market, Khan said she should press still in Brexit negotiations for "privileged access" to the trading area and for London to have the ability to hire the right talent from abroad.



After meeting Norway's prime minister, Khan said he was telling European partners in Davos that "so-called hard Brexit may not benefit London or the UK because firms will leave London, but there's no guarantee they're going to go to Paris, Madrid, Frankfurt or Berlin."

"The reality is they'll probably go to Hong Kong, Singapore or New York. So a so-called hard Brexit could be a lose-lose, a lose for London and the UK, and a lose for the EU too," he said.



So far, however, European rivals to London appear to be winning out.
US bank Goldman Sachs will move 1,000 staff from London to Frankfurt as part of a post-Brexit reorganisation that will reduce its City headcount by half, German business daily Handelsblatt reported Thursday.

British bank HSBC confirmed Wednesday that 1,000 of its investment banking jobs would leave London for Paris. Its announcement came a day after May announced that Britain would leave the European common market as part of the Brexit process.

Multinational banks with a European base in London risk losing the right to do business in the remaining 27 EU countries once Britain has left, as UK-based financial firms may no longer be granted a "passport" to trade within the bloc.



Khan said it was "good news" at least that May along with her finance and trade ministers had come to Davos to engage with the business community. He stressed: "London's been open to trade, people and ideas for more than 1,000 years. That's not going to change."