Professor Philip Lane:

I will make a couple of observations on that before I turn to Mr. Sibley and Ms Rowland who are responsible for different authorisation processes. What we are seeing now is not necessarily the end of this. For now, firms must have a contingency plan in place. By and large, one basic element and important influence on where firms go is where they already are. It is a lot easier to expand or think about a location about which one has some knowledge. That is to our benefit because we have plenty of firms here already.

This will be a dynamic process because financial systems tend to cluster depending on a particular line of activity. Paris has quite a lot of trading floors and there is a match with the skills available in the city. Ireland has a lot of asset managers and risk and compliance-type functions. The single financial system in Europe means there can be different clusters in different cities. Frankfurt also has a cluster of banks. There could be a second round to the process whereby companies which initially relocated to the most convenient place re-examine that decision and decide that this or that location is a better long-term home. It is not just a question of what is happening this year or next year.