LONDON (Oct 28): There is likely to be a significant flight of financial activity out of Britain if companies are no longer regulated on equivalent terms to those in the European Union after Brexit, European Central Bank council member Philip Lane said on Friday. Their long-term prospects hinge on what happens to Britain's access to the EU's "passporting" arrangement, which allows businesses regulated in member states to sell financial services across Europe. Some banks are already preparing to move part of their operations as early as next year, fearing that Britain is heading for a so-called hard Brexit in which it would lose access to the European single market. "However, in scenarios in which UK-resident firms are no longer treated as equivalent to EU firms for regulatory purposes, it is likely that significant migration of financial activity from the UK to the EU will occur." Cities around Europe are already vying for the potential new business, including financial centres in Germany, France, the Netherlands, Luxembourg and Ireland, where Lane is the governor of the Central Bank.

Source: The Edge Markets October 28, 2016 09:22 UTC