- Moody’s says impact of Brexit and end of freedom of movement ‘modest’
- Anti-Brexit campaigners warned banks would be devasted by Leave vote
- Credit agency said: ‘Critical factors such as capital and liquidity.. are unlikely to face material changes due to Brexit’
Banks will not really suffer if a Brexit deal ends freedom of movement across the EU, an influential credit rating agency has said.
Experts from Moody’s have said the impact on the City of London of the loss of ‘passporting rights’ is likely to be ‘modest’.
Its report contrasts with doom-laden predictions from Remainers who predicted the banking sector would be devastated by Brexit.
But Moody’s said ending passporting rights would still be manageable for banks.
‘The greater impact would be felt through higher costs and diversion of management attention, as the companies concerned restructure, reducing profitability for a time,’ it said.
Theresa May told EU leaders that they will have no choice but to make deals with Britain in post-Brexit world
‘This is credit negative, but manageable. And other critical factors such as capital and liquidity, which are largely determined by global standards, are unlikely to face material changes due to Brexit per se.’
Moody’s report was released after comments from Bundesbank president Jens Weidmann, who said that Britain would have to remain part of the EEA to maintain passport rights.
Mr Weidmann told the Guardian: ‘Passporting rights are tied to the single market and would automatically cease to apply if Great Britain is no longer at least part of the European Economic Area.’
Meanwhile Theresa May told the EU’s posturing leaders yesterday that they will have no choice but to agree a trade deal with Brexit Britain.
In a defiant blast delivered en route to a summit of world leaders, the Prime Minister said it was firmly in the interests of the 27 remaining members of the Brussels club to conclude successful talks with the UK.
She was immediately backed up by International Trade Secretary Liam Fox, who said the EU has far and away the most to lose if no deal on trade is reached. He pointed out that we import much more from EU countries than we sell to them.
Mrs May’s comments on trade are a rebuttal to the EU chiefs and national leaders who have been sabre-rattling over the UK’s chances of securing a post-Brexit deal.