StanChart CFO says second referendum ‘a way forward’ to break Brexit stalemate

British and EU flags flutter outside the Houses of Parliament in London
FILE PHOTO – British and EU flags flutter outside the Houses of Parliament in London, Britain January 17, 2019. REUTERS/Clodagh Kilcoyne

January 22, 2019

By Silvia Aloisi

DAVOS, Switzerland (Reuters) – The chief financial officer of Asia-focused bank Standard Chartered <STAN.L> believes a second referendum on Britain’s membership of the European Union could be a way to end a paralyzing parliamentary deadlock on future ties with the bloc.

Speaking to Reuters at the Global Economic Forum in Davos on Tuesday, Andy Halford said there was a “reasonably compelling argument” for handing back decision-making power to the people, in view of Prime Minister Theresa May’s failure to unite warring politicians behind her controversial EU divorce deal.

Senior bank executives have until now avoided comment on the possible merits of a second referendum, after several large institutions drew criticism for their strong financial backing of the failed campaign to stay in the EU in 2016.

“The Houses of Parliament are there democratically to represent the people and therefore ostensibly the decision should lie with them,” Halford said.

“However, in a situation where there is a gridlock in that body … going directly to the people and hearing exactly what the people would want to do now that they have had two more years of information being fed to them — that has a strong argument for being a way forward in the event of the other options failing to reach a conclusion,” he added.

In a separate interview with Reuters TV, Mike Corbat, the chief executive of Citi <C.N> described the concept of a second referendum as a means to relieve the Brexit paralysis as “a challenge”.

“It goes against what people would describe as the will of the people,” said Corbat. “‘You asked me, I told you, and now you are asking me again,’” he said.

“The path right now is the will of the people and to get to something that is reasonable on both sides.”

Other senior financial leaders were more optimistic a deal would be struck between the EU and Britain before Brexit Day, even if it came at the eleventh hour.

“Clearly you have a political impasse … in a way you never should have expected an end to the negotiations until the end,” Jes Staley, Chief Executive of Barclays <BARC.L> told Reuters.

“I would still bet that this is going to go on for a good number of weeks. The pressure is going to build on political parties on both sides of the debate and my hope is we come to a compromise.”

StanChart, Barclays and Citi are just three of several global lenders grappling with the redistribution of functions and staff to multiple EU outposts in a bid to keep business running smoothly after Britain leaves the EU on March 29.

The activities reflect months of planning aimed at protecting clients in the event of a disorderly British exit, which Halford said would “seriously risk momentum in the economy”.

“… The worst thing would be to crash out in a way that has not been planned for,” he said.

German and European regulators have granted StanChart permission to convert its Frankfurt branch into a fully-fledged subsidiary, to mitigate the impact of the loss of critical “passporting” rights which enabled non-EU banks headquartered in Britain to do business across the single market, Reuters previously reported.

Halford said the bank already had around 100 people in Frankfurt and was looking to move “several tens” more there.

Halford has served as StanChart’s finance director since July 2014 and has sat on the board of British retailer Marks & Spencer <MKS.L> for the last five years.

(Reporting by Silvia Aloisi, Writing by Sinead Cruise, Editing by Catherine Evans)

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