Japanese banks have told British Prime Minister Theresa May that they will move some of their operations out of London within the next half a year unless she tells them about her plans for Brexit.
Financial operations, including Nomura and Daiwa Capital Markets, employ thousands of people within Britain. However, those UK jobs are now understood to be under threat after they issued their ultimatum at the start of this month.
According to reports, the threats were made at a high level meeting with international trade minister Mark Garnier and City minister Simon Kirby. The Japanese companies say that they are worried that the European Union will take away passporting rights from firms based in Britain once Brexit takes place.
The Chancellor Philip Hammond has said that he does understand their fears, saying that for them it is very black and white: “They either have access to their markets or they don’t have access.” If they continue to have full access, they will be able to operate as they do currently, but they will have to look at restructuring if the situation changes as a result of Brexit.
Many foreign banks have already sought reassurances that passporting rights will still be kept after Britain invokes Article 50 to begin the process to leave the EU. However, this is not something that the Chancellor is able to guarantee. The fear is that many institutions will leave Britain if they cannot operate in the same way as they currently do.
However, a source at a major Japanese bank has said these fears are unfounded and there will not be some sort of mass exodus to mainland Europe. The only change, they said, was that some staff may have to be employed in Europe to deal with customers on the Continent. Some large banks already have offices there anyway.