Brexit set to jack up banks’ capital costs
Split into UK and EU arms will reduce netting benefits and capital flexibility
Divorce doesn’t usually come cheap. Besides immediate legal fees, the former cohabitants face higher long-term costs of running two separate households.
Likewise, banks are bracing for a possible increase in overall capital costs as they ready a post-Brexit breakup of their London hubs into UK and European Union arms. Whether that will happen for a specific bank depends mainly on the kind of businesses it has in each of the two locations and on what stance EU supervisors will take on its
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