The UK economy has paid a price for Brexit, according to Barclays (BARC.L) CEO Jes Staley.
“London's going to stay the financial capital of Europe in my view,” Staley said at Yahoo Finance’s All Market Summit. “But there's been a price to be paid for it.”
Staley said Brexit was forcing banks to move money away from London to support businesses that could operate in Europe after Brexit.
“We basically restructured the bank to deal with whatever happens in Brexit,” he said. “We've taken a third of our British bank, and we are now the largest bank in Ireland. And all of our branches, from Frankfurt, to Milan, to Madrid, are now branches not of a bank in London, but of a bank in Ireland. And the capital necessary to support that bank in Ireland has moved to Ireland. So that, on one level, is, I think, a loss.”
Staley said the wider UK economy is also “feeling the burden” of Brexit. UK GDP growth has slowed to a crawl and there are fears that the economy could tip into recession.
“Obviously, sterling — the exchange rate between the dollar and sterling is off a lot,” he said. “The economy clearly is growing at a slower pace than it otherwise would. Investment is not being made in the UK that would otherwise be made.”
He added: “Now over the long term, over 20, 30, 40 years, will it have been a good thing or a bad thing economically to have independence away from Brussels? That's a fair question to ask.”
Staley’s comments came at Yahoo Finance’s All Market Summit in New York last week, where he was interviewed on stage by Yahoo Finance’s editor-in-chief Andy Serwer.
Staley also said Brexit was one of three factors weighing on Barclays share price, saying it was “undervalued”. Barclays stock has declined about 40% over the last five years, despite improving profitability.