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UBS chooses Frankfurt as post-Brexit EU headquarters and prepares for no trade deal

'The financial system is already operating on the assumption that there is no agreement,' between the UK and EU, chief executive Sergio Ermotti says

Ben Chapman
Monday 17 September 2018 13:39 BST
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UBS decided on the German financial centre a few weeks ago
UBS decided on the German financial centre a few weeks ago

Swiss bank UBS has chosen Frankfurt as the base for its EU operations after Brexit, chief executive Sergio Ermotti said on Monday.

UBS decided on the German financial centre a few weeks ago and had been forced to prepare for a no-deal Brexit, Mr Ermotti told Bloomberg TV.

“The financial system is already operating on the assumption that there is no agreement,” between the UK and EU, Mr Ermotti said.

“Whatever is going to happen from now onwards, it’s not going to make the exercise less expensive.”

Brexit has already had an impact on companies across the continent, Mr Ermotti said.

“It’s a complication that undermines the willingness to make investments.

“In the UK and in general in Europe this has been something that has prevented people taking action and investing for the future.”

He added that the bank will pursue a decentralised strategy in Europe, with operations in Paris, Madrid and Milan.

Mr Ermotti played down fears that Brexit could lead to a new banking crisis. “I think the system is well prepared. I don’t think the next crisis is going to be a banking crisis. The banking system is very resilient.”

However, Brexit could trigger a slowdown in the economy, he said. "That is clear".

Also on Monday, International Monetary Fund (IMF) chief Christine Lagarde said that no conceivable Brexit deal will be as beneficial for the economy as staying in the European Union.

“Whatever the deal is will not be as good as it is at the moment,” she told an audience at the Treasury.

“Let me be clear, compared with today’s smooth single market, all the likely Brexit scenarios will have costs for the economy and to a lesser extent as well for the EU,” she said.

“The larger the impediments to trade in the new relationship, the costlier it will be.

“This should be fairly obvious, but it seems that sometimes it is not.”

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