Former British leader John Major doesn't believe big international banks will leave the the U.K. as a result of Brexit, but he sees another threat for the City of London.
Knighted by Queen Elizabeth in 2005, Britain's former Prime Minister has worked for Credit Suisse since 2001 – reason enough for the Swiss bank to invite him to speak at its annual Global Megatrends Conference in Singapore.
Major, who led Britain for seven years until 1997, didn't mince his words about Brexit, saying he regretted the decision by British voters to leave the European Union. The move is lamentable economically for Britain's 65 million people as well as the bloc, he said.
Major, who signed the Maastricht Treaty in 1992 on behalf of Britain, has long been a backer of the EU.
Gradual Decline
«Banks won't disappear from London,» Major said. The EU can't replicate London, and trading activities in the City will continue to play a big role.
However, London should brace for the mid-term, when the financial services industry will no longer be able to attract new investments, he said.
The EU's policies will spark a shift, with London becoming less influential over time.
«There won't be an economic catastrophe in the foreseeable future for Britain,» Major said – just a gradual but consistent decline.
Historical Error
One-third of Britons will be in a poorer economic position in 2020 than they were in 2006 – before the financial crisis, Major said. Fears over the decline are part of what fuelled the Brexit vote, he said, which he termed a major historical error which will weaken Britain versus superpowers like the U.S. and China.
His comments come just days after Britain's Prime Minister Theresa May called snap elections for June 8, in a bid to expand her negotiating power as Britain heads into the two-year process of disentangling itself from the EU.
