Plea for time to help London adapt to future trading relationship with EU
Huge risk and harm could be inflicted on London's financial services sector if the industry is not given enough time to adjust to Britain's future trading relationship with the EU, banking bosses have warned.
The sector may need two to three years to adapt to a new trade deal without harming financial stability, according to Alex Wilmot-Sitwell, head of European operations at the Bank of America Merrill Lynch.
He said the process of migration was "very dangerous and fraught with risk".
"The materials being moved are risky materials and you don't move nuclear waste in a race you do it in a very carefully coordinated and managed process," he added.
"The materials are perfectly safe as along as they are properly handled and so long as the period of time to move them is suitable."
He was joined at the House of Lords sub-committee by Douglas Flint, group chairman of HSBC, who expressed concern about London's financial sector becoming "fragmented".
Mr Flint said London attracted a wealth of business because clients were able to find all the financial services they needed in one place.
However, he warned that if certain services were to move to different financial centres across the globe, the fragmentation would "add to cost, complexity and potentially to risk".
HSBC said in February that it could move around 1,000 jobs from London to Paris if Britain voted to leave the EU.
Mr Flint added that it would be "very bad" for London's financial ecosystem if it lost euro-denominated clearing to another global financial centre as a result of the Brexit vote.
"To take away one of the currencies from that off-set arrangement seriously damages it and is inefficient.
"You also invite people to say where could we do it all in one place and no doubt other jurisdictions would leap at the opportunity to try and create something that takes away from the ecosystem that dominates."
Asked whether there had been a "chilling effect" triggered by Britain's vote to leave the European Union, Mr Wilmot-Sitwell said this was not the case because market activity had recovered to levels "consistent with a normal market environment".
However, Elizabeth Corley, vice chair of Allianz Global Investors, said anecdotal evidence suggested that in some sectors there is a hesitation to commit capital expenditure into inward investment.
She added: "When we speak to some of the companies in which we invest there is definitely more caution."