ABSTRACT
As the UK left the EU in January 2020, the outcome of the negotiations process to determine its future relationship with the EU can lead to the relocation of some banking activities to other financial centres in the EU. The uncertainty created in the aftermath of the controversial Brexit vote has been affecting any plans among international banking groups to expand their UK-based operations. In addition, the impact of Brexit can affect transaction costs as banking regulation can diverge from the EU legislative framework. Compliance with different regulatory regimes can create additional costs for banks, which are likely to be passed on to customers and retail investors. Until more clarity is provided, the UK financial services sector will continue to face the threat of losing business and jobs to the rest of the EU. This chapter examines the position of the UK banking sector under different scenarios of the future relationship between the UK and EU that currently appears more likely where UK banks will have to rely on equivalence determinations for access to the Single Market. It also discusses the consequences of the UK becoming a third country on two crucial areas, namely, bank branches and bank resolution.
