LONDON: The chairman of RBS, Sir Howard Davies, has backed calls for a transitional deal with Europe when Britain leaves the union, warning of the risk to banks if they swiftly lost access to the single market and passporting rights. “I think it is damaging if we don’t get a transitional deal, because I think you will then see banks and financial institutions making decisions on the basis of uncertainty,” he said speaking on TV show. Cutting off London’s financial services from Europe risks destabilising “the whole of of the European financial markets”, said the bank boss, who was opposed to Brexit. “what is really important is the transitional arrangements, so what we are particularly focused on in the City at the moment is to try to get an understanding that actually allowing a cliff-edge departure of Brexit would be damaging to everybody because about three quarters of all European capital market transactions take place in London, often by French banks or German banks et cetera but they take place in London.”
Davies downplayed RBS’s own exposure to Brexit, however, and said that any decision on moving parts of the business abroad would not be taken until the bank knows whether there will still be passporting rights. “But RBS in fact as a very British focused bank these days having had a lot of foreign adventures which didn’t turn out too well, we’re not so much affected by Brexit ourselves,” he said. “I think that makes, that makes life difficult to value the shares,” he said, adding that he didn’t know wha the election of Donald Trump would mean for the settlement.