Brexit Time Bomb Is Ticking: British Bankers Warn of Financial Breakdown; Fear Grows of U.K. Constitutional Crisis and Breakup
Oct. 24, 2016 (EIRNS)—Over the weekend, the Observer posted an alarmed and threatening op-ed by British Bankers Association (BBA) CEO Anthony Browne, warning that "Brexit Politicians Are Putting Us On a Fast Track to Financial Jeopardy." The United Kingdom and Europe need to remember that banks in the U.K. have some $1.35 trillion-worth of loans out to European Union countries and companies, "keeping the continent afloat financially." If European Union governments don’t agree to let Britain stay without restrictions in Europe’s integrated financial market after Brexit, "there is a real risk of disruption to Europe’s financial markets," he warned.
Browne may be threatening, but with panic, too: "Banker colleagues in other EU countries all agree that disrupting the free trade in financial services would be self-inflicted damage. The top regulators in the U.K. and EU also agree that we must retain the integrated financial market. If we left it all to the regulators, we would have a relatively quick and rational economic solution. But politics trumps economics and it will be the politicians who decide,"
"If the Brexit is a ‘hard’ one, ‘there could be a cliff edge’ for banks.... Much of the £20 billion a year cross-Channel trade in financial services will be thrown into, at best, legal doubt; at worst, it will just become illegal, with banks losing, overnight, regulatory approval to provide services."
In its news article on Browne’s op-ed, the Observer admits that the breakdown of the Canada-EU free trade accord is a sign of what could happen on the financial Brexit negotiations.
Simultaneously, the potential for a breakup of the United Kingdom itself out of Brexit is back on the front burner. Prime Minister Teresa May hosted a meeting on Monday of the Joint Ministerial Council (JMC)—with First Ministers of Wales, Scotland, and Northern Ireland—to start working out an agreement on how Brexit will be negotiated.
As they met, London’s Institute for Government published a report warning that May could face a constitutional crisis if no consensus is reached soon. No quick consensus is in sight. Scotland and Wales are demanding that the decision to invoke Article 50 to withdraw from the EU should be the subject of a vote in all four U.K. parliaments and assemblies.
Michael Russell, Scotland’s Brexit minister, told BBC Radio 4’s Today program on Monday that "that it would be a ‘strange world’ if special access to the single market was secured for bankers, but not for Scotland," the Telegraph reported. He added:
"full independence has got to be on the table... [Scottish First Minister] Nicola Sturgeon has been absolutely clear that we must keep all options open.... Of course independence has to be an option. It would be ridiculous to say it shouldn’t be."