Politicians must work to ensure that London retains its position as a global financial centre as Brexit negotiations begin, said Bank of England governor Mark Carney on Friday.
In a speech on the financial system, Carney reiterated the importance of maintaining London’s position as “Europe’s investment banker” as post-Brexit strategies begin to materialise. He described the Brexit negotiations as a “litmus test for responsible financial globalisation”, adding that “a decade of hard fought financial reform creates enormous opportunities.”
He urged politicians not to give into protectionism, adding that “the road less taken is often the most rewarding.”
His speech comes shortly after Theresa May triggered Article 50, setting in motion the Brexit process. A key concern for London’s financial institutions is whether they will retain European ‘passporting’ rights, allowing businesses to operate anywhere across the EU.
Alongside Carney’s speech in Canary Wharf on Friday, the Bank of England published a letter that it had sent to all banks, insurers and other financial firms, highlighting the importance of contingency plans post Brexit.
Sam Woods, the Bank’s deputy governor for prudential regulation and head of the Prudential Regulation Authority, wrote in the letter: “Many firms are well-advanced in their planning and have engaged closely with the PRA as part of that process. However, our current assessment is that the level of planning is uneven across firms and plans may not be being sufficiently tested against the most adverse potential outcomes.”