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Wall Street executives warn Brexit could hurt City | Wall Street executives warn Brexit could hurt City |
(35 minutes later) | |
The heads of two major Wall Street companies have warned that the UK financial services industry could be damaged by Brexit. | The heads of two major Wall Street companies have warned that the UK financial services industry could be damaged by Brexit. |
President of investment bank Morgan Stanley, Colm Kelleher, said the City would "suffer… the issue is how much". | President of investment bank Morgan Stanley, Colm Kelleher, said the City would "suffer… the issue is how much". |
Meanwhile, Rob Kapito, head of one of the world's largest investment houses Blackrock, said there was "a lot of concern" in the financial community. | Meanwhile, Rob Kapito, head of one of the world's largest investment houses Blackrock, said there was "a lot of concern" in the financial community. |
He also said voters had not been given enough facts before the EU referendum. | He also said voters had not been given enough facts before the EU referendum. |
"The unintended consequences of Brexit will be significant for everyone across the UK," he said. | "The unintended consequences of Brexit will be significant for everyone across the UK," he said. |
'Uncertainty' | 'Uncertainty' |
Mr Kelleher said his bank's immediate concern was over whether to invest further in the UK. | Mr Kelleher said his bank's immediate concern was over whether to invest further in the UK. |
This was because the terms of a potential Brexit deal were still unclear. | This was because the terms of a potential Brexit deal were still unclear. |
"It is that uncertainty that is causing problems," he told the BBC's Today programme. | "It is that uncertainty that is causing problems," he told the BBC's Today programme. |
However, he said a bigger worry was whether banks would retain their "passporting rights" after Britain leaves the bloc. | However, he said a bigger worry was whether banks would retain their "passporting rights" after Britain leaves the bloc. |
These rights currently allow them to trade across the bloc without the need for individual country licences. | These rights currently allow them to trade across the bloc without the need for individual country licences. |
He said: "I am convinced that London will retain its reputation as a prestigious global financial services centre. | He said: "I am convinced that London will retain its reputation as a prestigious global financial services centre. |
"But clearly some size of our businesses will have to be moved out of London into European headquarters with the absence of any passporting agreement - but it's very hard to ascertain what that will mean at the moment." | "But clearly some size of our businesses will have to be moved out of London into European headquarters with the absence of any passporting agreement - but it's very hard to ascertain what that will mean at the moment." |
He also said Brexit would damage the rest of Europe, as 80% of continental lending was handled by global banks with UK headquarters. | He also said Brexit would damage the rest of Europe, as 80% of continental lending was handled by global banks with UK headquarters. |
For this reason he urged UK ministers and Brussels to include a "long transitional period" for banks as part of any Brexit deal. | For this reason he urged UK ministers and Brussels to include a "long transitional period" for banks as part of any Brexit deal. |
His comments were echoed by Mr Kapito, whose firm Blackrock manages assets worth $5tn (£3.8tn). | His comments were echoed by Mr Kapito, whose firm Blackrock manages assets worth $5tn (£3.8tn). |
"I don't think there is any good [financial services] firm that has not already started to look at real estate in different areas outside the UK in case they have to move larger operations," Mr Kapito said. | "I don't think there is any good [financial services] firm that has not already started to look at real estate in different areas outside the UK in case they have to move larger operations," Mr Kapito said. |
"There is no one that doesn't have people looking at tax implications, investment implications, manufacturing implications." | "There is no one that doesn't have people looking at tax implications, investment implications, manufacturing implications." |
He said the decision to leave the EU could have a big impact on financial companies' staff, too. | He said the decision to leave the EU could have a big impact on financial companies' staff, too. |
This is because many work "cross border" and many "have spouses that work cross border". | This is because many work "cross border" and many "have spouses that work cross border". |
"There are very few answers to the questions will they be able to maintain their jobs, will they have to move home, where [Europe's] the financial centre might move to," he said. | "There are very few answers to the questions will they be able to maintain their jobs, will they have to move home, where [Europe's] the financial centre might move to," he said. |