Government institutions are doing their best trying to encourage ‘a steady as she goes’ attitude and 'nothing has changed yet' environment, but, for many, the details of the task at hand are only now beginning to emerge. We need to get comfortable dealing with new and critical issues that arise daily.
Much of my life has been consumed with answering Brexit questions related to banking and finance of late, and I do not claim much expertise beyond these subjects and some areas of regulation and education. However, with each day I seem to attract an ever wider field of questions that demonstrate how uncertainty (and its likely consequences) are spreading in the UK.
From questions like 'will my [foreign] doctor have to leave the UK' to 'how can we be more like America?' I can’t answer the first one, but the second is easy, add 300 hundred million people, build a giant army, get a few giant technology, aerospace, and chemical companies, and add a few bits more (maybe Donald Trump) and you’re there – only kidding! A retiree came up to me and said: surely one of the first things to be negotiated with the EU is continuing our health benefits arrangements as I am planning to retire in Spain. Sure, we will?? But, perhaps my favourite passing comment came today upon leaving the BBC’s television studio where someone I’ve never met before approached me and said, “I’ve had enough of Brexit, I want my country back, the one we had two weeks ago”. These comments demonstrate people’s common frustrations, but these are barely a scratch in the surface in the complex world of managing in banking and finance.
The uncertainty of foreigners’ residency, as an example, implies that every bank and finance business in the UK needs to quickly survey its employee register and understand the nationalities of its employees - are some key people in the IT department German, Estonian, or Spanish? What about management? What will be the government policy about their ability to stay? They may have been happy employees, and they may be now thinking about leaving. How replaceable are they? It may not just be the employees - what might they hear from family members?
Government institutions are doing their best trying to encourage ‘a steady as she goes’ attitude and 'nothing has changed yet' environment, but, for many, the details of the task at hand are only now beginning to emerge. We need to get comfortable dealing with new and critical issues that arise daily. Risk management is going to evolve quickly and will need many more people and new skills – likely at a very large cost to all.
Dr Peter Hahn is the Henry Grunfeld Professor of Banking at ifs. You can read his entire series on Brexit and it's implications here.