After Brexit needs sustained British government impetus, the City of London policy chief said on Wednesday that COVID 19 may mask some of the impact of the country leaving the EU.
The financial sector of the U.K. has lost most of its access to the European Union after it left the bloc a year ago.
Catherine McGuinness, who has a five-year term as policy chief for London's financial district, said that the full implications were still working their way through, despite the fact that it has adapted smoothly to Brexit.
More than anticipated, there were more than 7,400 finance jobs moving from London to new EU banking hubs. McGuinness said that COVID-19 may mask what is really going on.
The pressure to move jobs to EU hubs was slowed last year due to COVID 19 lockdowns. She said that we are certainly not at a new normal. We need to put Brexit behind us. Our competitive edge is what really matters in the future. It is not a given that people will want to come to London. Amsterdam overtook London to become Europe's biggest share- trading center a year ago, while some derivatives business left for New York.
Banks in London are frustrated at the cost and time of running duplicate British and EU hubs, but they are still committed to having operations in the capital, McGuinness said.
After delays due to flu restrictions, the European Central Bank has resumed pressure on banks in London s financial districts to adequately staff their new EU hubs.
McGuinness welcomed the British finance ministry's promise of a new chapter in financial services and its proposals to make the financial sector more attractive, with some changes such as flexible listing rules already in place.
She said more needs to be done to make the most of the U.K.'s new situation and to get on the front foot in global finance.
The finance ministry of the U.K. said it was delivering on its road map for keeping the City of London at the top table by making it more open, competitive, technologically advanced and sustainable.
It said we will continue to work at a pace to drive forward our reforms, along with the industry and regulators.
McGuinness said that relations with the EU need to be put on a new footing, although a proposed cooperation forum for financial watchdogs has yet to be signed off by the bloc.
Brussels wants the spat between the EU and the U.K. over the Northern Ireland protocol resolved first before it can begin rebuilding trust in cross-Channel finance.
McGuinness had to deal with damage from the Brexit at a time when COVID 19 restrictions were recently renewed due to the omicron variant, emptied its streets, putting at risk sandwich shops, bars and other services used by City workers.
She said that she was hopeful that we can get people back to their offices soon because for some of these businesses that have struggled to survive over the last couple of years, this may be the last straw.