British banks may lose their passporting rights to operate across the EU unless the UK stays within the European Economic Area.

The head of Germany’s central bank Jens Weidmann has warned on the impact it would have on the British banking industry, possibly forcing international banks to consider moving to other European cities to retain the ability to conduct business across the EU.

“Passporting rights are tied to the single market and would automatically cease to apply if Great Britain is no longer at least part of the European Economic Area,” Weidmann told the Guardian newspaper.

His comments come after the formation of a new lobby group led by Conservative Eurosceptics campaigning for Britain to leave the European single market and end free movement. The ‘Leave Means Leave’ campaign’s hard line would, according to Weidmann, include the end of passporting for British banks.

As part of the campaign’s launch, the group says remaining in the single market is the “‘no say. low growth, regulatory burden, sovereignty illusion’ option locking in perpetual trade deficits”.

Weidmann also warned of complacency over the health of Britain’s economy.

“Britain hasn’t even applied to leave yet,” he said. “To assume on the basis of the developments so far that there won’t be any negative consequences would be to draw false conclusions.”

19/09/2016