ECB criticises Brexit relocation plans

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The European Central Bank (ECB) have issued warnings to banks that their plans for after Brexit are inadequate. This is due to the setting up of “empty shell” systems in the EU which are not adequately staffed.

The ECB has stated in a newsletter that a considerable amount of relocation plans by banks which utilize the UK as their route to the EU, did not meet their expectations.

The newsletter details comments from the EU banking watchdog back in October, which involved a warning that entities could not set up “shells” with no real foundation in order to obtain access to the single market after Brexit.

The ECB also warned the banks about “double hatting” which is when employees have roles across various locations and so, ECB expressed concern in a quarterly supervisory update regarding the fact that employees may not be physically within the euro area.

Moreover, this may alarm London as the Bank of England have assessed the Brexit plans of 400 banks and concluded that 10,000 jobs could leave immediately after the UK leaves the EU. This also suggests that 75,000 roles could be lost in the long-term.