Credit Suisse to maintain London operations
CEO Tidjane Thiam warns against protectionism and tariffs following Brexit
Credit Suisse has confirmed it will maintain its London operations, but the Swiss bank’s chief executive officer has warned against a descent into protectionism and tariff barriers following Britain’s vote to exit the European Union last week.
In an exclusive interview on Wednesday, CEO Tidjane Thiam told South China Morning Post he feared the Brexit crisis could lead to “populist solutions that would not be conducive to growth in the world economy”.
“We need to make sure we maintain an open economic system, and keep lobbying and arguing for open trade and against tariff barriers to enable growth,” he added.
London and its relationship with the European Union are key to Credit Suisse and its operations in Europe, as Switzerland is not part of the EU.
The EU’s current passporting system allows banks with operations in the UK to access EU markets, but the Brexit vote has left it unclear what Britain’s relationship with the remaining EU states would be should it leave the trading bloc.
Under EU regulations, it can be up to two years for a country formally declaring to the European Council that it wishes to leave, and it leaving, and during the period new arrangements could be negotiated. The UK has yet to officially declare its departure.
“At this stage I think it’s too early to see the medium to long-term implications of the UK’s vote to leave,” said Thiam.
“So much depends on factors that remain unknown.
“We don’t know who will lead the government in the UK when the negotiations with the EU take place, or what or even when they will start to negotiate.”
“On the day of the result being announced, we sent a memo to our staff to say there would be no immediate impact on them.” said Thiam.
“When we know what arrangements the UK has made, we will make a decision, but that is probably two years away.”
In Bern on Tuesday, Reuters reported that the chairman of Credit Suisse, Urs Rohner said the uncertainty caused by Britain’s vote was unlikely to go away in the coming weeks.
“For a long time you won’t know exactly what the road map is. That is the worst thing for the markets,” Rohner was quoted as telling a panel discussion at a Swiss conference.
Many companies across the UK, especially firms which view the country as a springboard into Europe, have been left in limbo by the Brexit decision.
James Coiley, finance partner at British law firm Ashurst, said: “The uncertainty as to what a post-Brexit world will look like means that assessment of key legal and risk implications and forward planning for businesses may be challenging.
“Brexit has the potential to affect the strategy and footprint of many firms,” he said.
“They will need to fight their corner with legislators and regulators in a bid to ensure that they can continue to access markets in their current form, failing which they need to be prepare from now to respond to events as they unfold through the political process.”