US financial sector “nervous” about hard Brexit, claims City of London Corporation

The financial services sector in the US is becoming increasingly nervous about the chances of a hard Brexit, as they view the lack of progress from outside the talks with concern.

City of London Corporation’s policy chief Catherine McGuinness was told the sector had moved beyond its initial “surprise” and “curiosity” at the events unfolding on this side of the Atlantic, with fear creeping in that no real movement had been made since last summer’s referendum.

“The message was that this is taking too long and it may have implications beyond your borders,” McGuinness said.

“[They] are becoming nervous,” she said. “It wasn’t just curiosity, it was concern at the lack of progress that we have been making, and nervousness that it had implications beyond Europe’s borders in terms of causing disruption to markets.”

While New York expects to benefit from some of the disruption, the overriding sense was that Brexit could cause global ripples if progress failed to materialise, she added. Fears that the UK would simply “crash out” were also growing.

She was speaking after a three-day fact finding mission, where she met US Treasury officials, as well as Commodity Futures Trading Commission (CFTC) chairman Chris Giancarlo, and representatives from the International Swaps and Derivatives Association (ISDA).

McGuinness noted that the recent IRSG report, which set out a blueprint for how financial services might continue to do business after Brexit, had been welcomed in the States. But she acknowledged that progress on the matter back home was painfully slow, saying she had “very little sense” of when – or if – a financial services position paper could be expected from the government.

McGuinness’s comments came a day after commerce secretary Wilbur Ross told the CBI conference that America was closely watching the Brexit process, and urged the UK to ditch the European Union’s “protectionist” stance on food standards and other regulatory issues in order to trade more with the US.