Britain's financial sector reels after Brexit bombshell

Fri Jun 24, 2016 12:18pm EDT
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By Sinead Cruise, Andrew MacAskill and Lawrence White

LONDON (Reuters) - Britain's 2.2 million financial industry workers face years of uncertainty and the risk of thousands of job cuts after the country voted to quit the European Union, an upheaval that threatens London's dominance of finance.

The 'Vote Leave' campaign fronted by a slew of Conservative lawmakers and financial industry veterans claimed victory over its 'Britain Stronger in Europe' rival, after 52 percent of Britons voted to support their plan to leave the 28-nation club.

The news hammered the stock values of banks from mainland Europe to Wall Street giants with large operations in London, pushing job security fears to levels unseen since the financial crisis of 2008.

Some of Europe's top lenders, from France's Societe Generale to Britain's Lloyds, saw one fifth wiped off the value of their stock. Shares of elite wealth managers Schroders, Aberdeen Asset Management and St. James's Place fell sharply.

The referendum outcome casts uncertainty over the future of Britain's financial services industry and its ability to sell products into the European Union.

All depends on the divorce between Europe and Britain, and the latter's ability to retain access to the European free market.

European government officials had said UK-based firms could lose these privileges after Brexit, a move that could prompt banks to shift some of their operations to Frankfurt, Paris or Dublin if they want to serve EU clients.

The mood in the restaurants and coffee shops in the high-rise banking hub of Canary Wharf, home to JPMorgan, Citi, HSBC and Barclays, was sober and contemplative.   Continued...

Traders from BGC in London's Canary Wharf react after Britain voted to leave the EU.       REUTERS/Russell Boyce