A brain drain spurred by unfavourable regulatory and market conditions is diminishing UK banks’ effectiveness for their corporate customers, says the British Banking Association (BBA).
In a new report Winning the Global Race, published on 13 November, the organisation flagged up a number of stumbling blocks that are currently hindering UK-based lenders, leading to outcomes that are likely to worry corporate treasurers – for example:
BBA chief executive Anthony Browne said: “We have now reached a watershed moment in Britain’s competitiveness as an international banking centre.
“The balance of push and pull factors, including tax and capital treatment, unilateral and extraterritorial regulation and overall uncertainty, are weighing heavily in boardrooms across the industry. Many international banks have been moving jobs overseas or deciding not to invest in the UK.”
He added: “Our report shows we cannot be complacent. Wholesale banking is an internationally mobile industry and there is a real risk this decline could accelerate.”
Browne stressed that the industry must work with regulators and the government “to maintain the UK’s leading position in the global competitiveness race”, and deliver a ‘new settlement’ for the industry that chancellor George Osborne described in his Mansion House speech over the summer.
A roadmap for that process is outlined in the report. As Browne explained, the BBA is “setting out a joint plan of action for industry, regulators and the government to tackle together the local and global threats to our competitiveness.
“Taking action now will secure the UK’s position and maintain the considerable contribution that international wholesale banking makes to the British economy.”
Download the full report, Winning the Global Race, from the BBA