Brexit Has Already Happened for Banks Building Out EU Units

(Bloomberg) --

The U.K. has already left the European Union, at least if you're a bank moving staff and assets to the bloc to maintain access to clients.

Brexit was supposed to happen on March 29, and the European Central Bank had given lenders no more than two to three years from that date to build up their new EU units. While the Brexit date has since been delayed, the ECB is holding lenders to their original deadlines, Claude Wampach, a member of the ECB's supervisory board, told Bloomberg.

“The moves are continuing according to the initial timelines,” Wampach said in an interview in Luxembourg, where he's also a director for banking supervision at the local markets regulator. “Those activities that don't have to move just yet are staying in the U.K.”

U.K. Prime Minister Theresa May has so far failed to get her exit deal through parliament. Deadlines to leave came and went in March and April, with the EU choosing to kick the can down the road to prevent an economy-jolting no-deal divorce. The next deadline is Oct. 31, but the EU could push it off again if Britain hasn't resolved its political impasse.

For banks that currently serve EU clients out of London, the region's financial capital, the U.K.'s departure from the bloc means they have to start booking business for those clients in local hubs like Frankfurt, Dublin, Paris or Luxembourg. They also need to move bankers, risk managers, compliance officers and traders to handle the business locally.

To contact the reporters on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net;Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Christian Baumgaertel, Marion Dakers

©2019 Bloomberg L.P.

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