Brexit: ‘De tijd tikt door en de spanning stijgt’

06 februari 2019
"De tijd tikt door en de spanning stijgt", zei Chris Buijink, voorzitter van de Nederlandse Vereniging van Banken, tijdens de eerste bijeenkomst van het jaar van de Foreign Bankers’ Association in the Netherlands, sprekend over Brexit.

Buijink zei optimistisch te zijn, zowel over de EU, die de afgelopen tien jaar verschillende crises heeft overwonnen, als over het Verenigd Koninkrijk. “Is dat niet de plek waar de gezond verstand filosofie werd uitgevonden?”

“Helaas schrijft het gezond verstand ook voor dat je je op het ergste voorbereidt. We zouden een no-deal resultaat als irrationeel kunnen beschouwen, maar politici hebben eerder irrationele resultaten opgeleverd, als 'slaapwandelaars in een catastrofe’. Dus, bereid je voor op het ergste, is wat de banksector in Nederland heeft gedaan. We proberen onze klanten via verschillende kanalen te informeren over de mogelijke gevolgen van een "no-deal" Brexit.”

Hieronder leest u de hele speech.

Gesproken woord geldt

Heavy Fog in Channel; continent cut off.’ That famous headline from the 1950s is often quoted to demonstrate Britain’s troubled relationship with Europe.

As we all know ‘fog’ is not an unusual weather condition on the British Isles. Last year in October, when I travelled from Amsterdam to London by plane to visit UK Finance, I missed my appointment with the Dutch ambassador because of it. London was covered by low hanging autumn fog. So we circled for more than an hour above the Channel.

The fog also clouds UK politics today, after various debates in the House of Commons. It’s sad that our British friends at this time seem to be at a loss about the political future of their country. It’s Groundhog Day all around.

We have learned a lot about the political system in the UK these last months. Parliament and parliamentary parties themselves are hopelessly divided. Of course, the main questions are: what will the future relationship between the UK and the EU look like? Do we get a deal or no deal?

The Withdrawal Agreement is important because it buys everyone time and would allow for the further preparation for a new type of relationship that has yet to be defined.

However, the Withdrawal Agreement in its current form is not being accepted by the UK parliament, which has ordered the British government by a small majority to re-open negotiations on the back-stop solution for the Northern Ireland border.

Time is ticking, and tension is rising. Will the fog lift in time? I am optimistic about the EU side. During the financial crisis the EU has shown that it could overcome the political divide on the euro and could improvise solutions where necessary. Maybe against my better judgment, I am still optimistic about the UK as well. Isn’t it the place where common sense philosophy was invented? Despite all the nonsensical internal politics, common sense should prevail on both sides of the channel.

Unfortunately, common sense also prescribes preparing for the worst. We might see a no deal outcome as irrational, but politicians have produced irrational outcomes before as ‘sleepwalkers’ into a catastrophe.

So, prepare for the worst, is what the banking industry in the Netherlands has done. We try to inform our clients through various channels about the possible consequences of a “no-deal” Brexit.

Clients of banks must also have their paperwork finished on time.

If on Friday the 29th of March no deal is made, we must hold our breath for the opening of the Stock Markets on Monday the 1st of April, also known as April Fools’ Day! That might be in that case a Black Monday, with troubles for the British Pound and government bonds.

It’s an illusion that such a development wouldn’t affect the EU as well, due to the extensive trade relationships and the important role of London. But precautions have been taken.

In the case of a no-deal the Dutch parliament has adopted a general Brexit preparedness law and has given powers to government to take measures if unforeseen problems occur. The European Commission has taken concrete steps for us to continue clearing activities of European banks in London for 12 months in the event of a no-deal. While these are good and necessary steps, they cannot be a replacement for the comprehensive future relationship we wish to have.

While the focus of negotiations for many sectors will be on a future trade agreement, there are very few trade rules in financial services. The relationship is likely to be defined through one-sided equivalence decisions taken by the European Commission. Of course, in return, any such decision should be reciprocated by the UK. Equivalence requires for UK laws to stay very close to current EU rules. Currently, UK rules are perfectly in line with EU standards; they are exactly the same and we wish for this to stay that way.

The future relationship with the UK should be the most ambitious equivalence regime there is. This should include areas such as MIFID where to date very few equivalence decisions have been taken.

Amidst the shambles and uncertainty of Brexit, companies in the UK including banks of course set out their strategy for the post Brexit era.

Amsterdam has won a big prize with the European Medicine Agency. NFIA reports that 250 companies have set up or are planning to set up shop in the Netherlands. Our Financial Conduct Authority AFM is working on some 150 applications of Asset Managers and Market Makers. Foreign banks already in the Netherlands have expanded some of their departments here, in particular some Japanese friends. NatWest Markets has returned in our association, formerly known in Holland as RBS.

The Commonwealth Bank of Australia will be a newcomer in our country as is the Japanese Norinchukin bank.

They are very welcome. All of this strengthens the financial services eco system in the Netherlands. And that is good. But we could have scored better. There’s no doubt the Dutch add-ons on renumerations legislation, the banking tax and the at times virulent public debate on banks and banking in this country have undermined our chances of attracting more banking activities at this time to the Netherlands.

That is self-inflicted. It underlines the importance of sticking to one set of European rules. Which is also the logical thing to do if we are serious about completing the Banking Union and one really integrated European Financial Market.

This unfortunate situation is partly self-inflicted too, this time from within our own industry.

2018 wasn’t a good year for the reputation of the banking industry in our country. The trust in our industry is still fragile and our relationship with politics in The Hague came under pressure again.

Of course, this had to do with the heated debate around remuneration at some banks, and the settlement between the prosecution and one of our members because of shortcomings with Anti Money Laundering (AML).

We were invited to no less than five hearings in parliament to explain our position.

Derivatives, remuneration, capital buffers, AML and the state of the industry 10 years after the crisis. Have you actually learned your lessons well? we were often asked by politicians of various parties.

If something goes wrong with one or more banks, it turns out that, in addition to the reputation of the banks involved, that also affects the entire industry, all of us.

That gives everyone a special responsibility, to their own institution, to their own colleagues in the first place; but also, to each other. Together we make the banking sector.

When it comes to AML, public and private entities need to work together, smarter. Of course, banks have to strengthen their role as gatekeepers of the financial system. But to be effective in fighting financial and economic crime, we need to do more.

Of the 23,000 reports of unusual transactions by banks in 2017, more than 4,000 were also regarded as suspect by the Financial Intelligence Unit. A much smaller number eventually leads to a criminal investigation.

We can do better if we join forces and work together.

That is why we as banks are now investigating whether we can jointly carry out the Know Your Customer process and the monitoring of transactions, so that we can look more closely at the whole picture, together with the FIU and investigative services.

We have to focus on the real threats and reports that will actually be used by the police and the Public Prosecution Service in criminal investigations.

That also requires effective European and international cooperation and decisiveness. After all, for the crooks Europe is without borders.

Another important area in which we seek close cooperation between the public and the private sector is care for the climate.

Together with the Associations of insurers, pension funds and asset managers, the banks have committed themselves voluntarily to the goals of the draft national Climate Agreement in decreasing the emission of carbon.

The financial industry sector will report on the climate impact of financing and investments from 2020 onwards and will have drawn up action plans to limit these by 2022 at the latest. The sector thus contributes to the achievement of the climate targets of Paris.

To meet the climate targets of Paris is essential for all of us. Not only to save the Dutch ‘Elfstedentocht’, but to build a good future for our children and grandchildren.

2019 is a special year for our industry that makes such an important contribution to the lives of so many people, consumers and entrepreneurs, and to society as a whole.

‘Big Changes, New Chances’, is the title of our medium-term agenda for 2019 and further. It will soon be available in English and we will then send it to you, of course.

For Europe, 2019 will become a crucial year in many aspects. New elections followed by many new parliamentarians and new European Commissioners. In getting acquainted with the newly elected officials, the European Banking Federation sees it as a priority to put the banking industry and its significance, clearly on their map. We will gladly contribute to that.

We aspire to contribute to an open economy and an open society, which is a good place for banks, domestic and foreign and their employees to establish themselves and to grow. 2019 will be a challenging year, but one thing is for sure. Whether it is fog, rain or snow – and we have them all in the Netherlands - we are better off working together within the NVB and the FBA.

As for the United Kingdom, to paraphrase the great Bard: ‘That scepter‘d Isle. That happy breed of men, that little world, that precious stone set in the silver sea. That blessed plot.’

Whatever the outcome will be, as the clock ticks the time away towards March 29th, let’s hope for a deal to be closed and if a definite conclusion on a deal is not reached, that a request to extend Article 50 will be made and granted. The saga continues.

Thank you.