German Central Bank Chief Warns City Of London On 'hard Brexit'

LONDON, (UrduPoint / Pakistan Point News -19th Sept,2016) : British banks risk losing their automatic right to trade in EU states as the country leaves the European Union, Germany's central bank chief said in an interview out Monday.

Jens Weidmann suggested that if Britain left the European Economic Area (EEA) -- a group of 31 European Union and other European states which allows them to be part of the single market -- it could mean financial services companies moving elsewhere.

In banking, "passporting rights are tied to the single market and would automatically cease to apply if Great Britain is no longer at least part of the European Economic Area," Weidmann said. Boris Johnson, a prominent campaigner to leave the EU in the June referendum who is now foreign secretary, has said he expects Britain to retain its passporting rights, which allow financial companies to sell services around the bloc.

But Weidmann warned that several businesses "will reconsider the location of their headquarters" from London, Europe's biggest financial centre. "As a significant financial centre and the seat of important regulatory and supervisory bodies, Frankfurt is attractive and will welcome newcomers," he said.

"But I don't expect a mass exodus from London to Frankfurt." The comments came in an interview with a group of European newspapers including Britain's Guardian, France's Le Monde and Germany's Suddeutsche Zeitung.