(Bloomberg) -- The U.K. risks a “flood” of financial firms departing the country if it fails to reach a binding agreement on a lengthy transition period for Brexit by the end of the year, according to the chair of an influential House of Lords committee.
“The clock is relentlessly ticking,” said Kishwer Falkner, who oversees the European Union financial affairs sub-committee. “Witness after witness told us that financial services industry won't be able to continue servicing cross-border clients after 2019 if a transition period is not agreed by the end of this year.”
Prime Minister Theresa May wants to get what she calls an implementation period in place, but the two sides haven't even started talking about how the arrangement might work as Brexit talks are still deadlocked over the divorce bill. The government is hoping for an agreement in the first quarter, but it hasn't set out clearly yet exactly how it wants it to operate. Banks aren't waiting around and a few have already applied to EU regulators for permits, signed leases on new offices and will soon start moving employees out of London.
“The more the government waits, the more the value of such a period irreversibly declines," Falkner said in a emailed statement. "The government must urgently negotiate a transition period to stop this trickle turning into a flood.”
To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net.
To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Emma Ross-Thomas at erossthomas@bloomberg.net, Jon Menon, Andrew Blackman
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