12 major banks are planning to expand their European presence following the United Kingdom’s exit from the EU, and others need to get going if they want to keep their rights.

According to Sabine Lautenschlaeger, a member of the executive board of the European Central Bank (ECB), time is running out for institutions that wish to make a move before Brexit comes into force.

“We cannot be sure whether the transitional period will really happen,” she said, according to a report from Associated Press. “Banks must continue to prepare for any outcome, including a hard Brexit.”

Under a hard Brexit, the UK would exit the European Union completely in March 2019, without any free-trade access to the zone. Banks operating in London would lose their automatic right to operate in the EU, including non-UK banks using London as their European gateways.

Banks that plan to relocate, or create a new European HQ, should have already submitted their applications, said Lautenschlaeger. She added that eight banks have already applied and four others have indicated they plan to “substantially increase their activities”.

In November 2017, David Davis, British secretary of state for exiting the European Union said that bank employees and other professionals would be able to move freely across Europe following Brexit.

London’s expertise and deep capital markets, plus similar regulatory goals to the EU would make London indispensable for the EU’s economy, according to Mr Davis.

It took less than a week for Davis’ counterpart, the EU’s chief Brexit negotiator Michel Barnier, to rectify the statement. “Brexit means Brexit, everywhere,” he said in response.

“On financial services, UK voices suggest that Brexit does not mean Brexit,” said Barnier in a speech in Brussels. “The legal consequence of Brexit is that the UK financial service providers lose their EU passport. This passport allows them to offer their services to a market of 500 million consumers and 22 million businesses.”

by Alex Hamilton
Alex is Senior Reporter at IBS Intelligence, follow him on Twitter or contact him at: alexanderh@ibsintelligence.com