Chairman of the Royal Bank of Scotland Talks Brexit with IE Finance Students
The chairman of the Royal Bank of Scotland spoke to IE Master in Finance students about Brexit and its effect on London’s role in world finance.
Sir Howard Davies, Chairman of the Royal Bank of Scotland, joined the ranks of the Titans of Finance, speaking to IE Business School students about “Will the City of London lose its financial dominance after Brexit?”
Davies explained London had maintained its place in the global market despite not being in the Eurozone and the rise of Asian market, until the financial crisis shook confidence in London and other European markets.
“And then comes Brexit,” Davies said, “Brexit cuts across these pre-existing trends.”
Davies said Brexit would further shift the weight of the financial market away from London.
He highlighted key areas affected by the United Kingdom’s divorce with Europe, including the inability of U.S. and Japanese firms in London to rely on a European “passport” to access EU clients and restrictions on staff mobility.
“Asset management that sells to retail EU clients is one of the activities under threat,” the banker explained.
Davies said some 7,000 jobs may move out of London, amounting to £1 trillion in assets and 63% of firms are considering or have confirmed plans to relocate operations or staff to Europe.
But, Davies said the shift was not necessarily a negative.
“A more dispersed financial sector is not such a bad thing.”
“A more dispersed financial sector is not such a bad thing,” Davies said, emphasizing that a multi-polar financial market distributes the wealth and responsibilities a hub generates.
Titans of Finance is part of the Master in Finance and Master in Advanced Finance programs and hosts top-level professionals from the finance industry on the most relevant issues in finance today. Recent topics include cross-border M&A transactions; current trends in the wealth management industry; why traditional measures of equity valuation are inappropriate and current trends in investment management, to name a few.