Business

US bankers: 'Brexit impact global'

European Union (L) and British Union Jack flags hang at a meeting for British citizens living in Germany to discuss the implications of Great Britain leaving the European Union Image copyright Getty Images

US bankers have written to Treasury Secretary Jacob Lew asking him to push for transparent Brexit negotiations in the interests of market stability.

They said Brexit "consequences are likely to be significant".

Highlighting Britain's role in the global financial system, they warn Brexit could affect jobs in the financial industry and beyond.

In a June referendum, the UK voted to leave the EU causing global uncertainty over the fallout of the separation.

In their letter, the bankers also said US companies in the UK rely on "passporting rights" between the UK and the remaining EU member states to allow UK-based firms to operate freely across the economic bloc.

They added that millions of people in the US are employed by UK and EU companies and called for a "smooth" transition period to give firms time to get used to changes in trade and investment.

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In the months since the UK vote to leave the European Union, markets around the globe have seen increased volatility with investors nervous about uncertainty in Europe.

The pound plunged on the day after the vote and has remaining at record low levels since then.

In their letter, the bankers stress that "for the prosperity of the US and world economies" it was vital that uncertainly was "kept to a minimum" and that existing trade ties were "disrupted as little as possible."

The signatories ask for:

  • Brexit negations to be transparent
  • stakeholders from the business community to be actively consulted
  • UK and EU to to agree arrangements in line with global standards
  • the adoption of a provisional, transitional arrangement to minimise uncertainty

The letter is signed by the chiefs of the American Bankers Association, the Financial Services Forum, the Financial Services Roundtable and the Securities Industry and Financial Markets Association.

Exit negotiations between London and Brussels have not yet begun and the uncertainty of the timeline has added to business uncertainty.

Substantive Brexit talks between the UK and the rest of the EU are unlikely to start much before the end of 2017, a former European Council president earlier this month told the BBC.

Herman Van Rompuy said negotiations were unlikely until a new German government was formed after next September's election.

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