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Britain’s Chancellor of the Exchequer Philip Hammond (C) talks with EU Commissioner of Economic and Financial Affairs, Taxation and Customs Pierre Moscovici (R) as Spain’s Economy Minister Luis de Guindos (L) before a session of the Economic and Financial Affairs, Council (Ecofin) with EU finance ministers on May 23, 2017 at the EU headquarters in Brussels.
British finance minister Philip Hammond told the board of U.S. investment bank Goldman Sachs that he was pushing for a lengthy transition period after Britain leaves the European Union, a source familiar with the talks said.
The source said Hammond made a presentation to the Goldman Sachs board on June 29 when chief executive Lloyd Blankfein was in London for the annual board meeting.
The source confirmed an earlier Sky News report which said Hammond had offered private reassurances that he wanted a long transition period to help banks prepare for Brexit and ease concerns of a “cliff-edge” exit from the bloc.
The Sky report said Hammond did not offer Goldman assurances above or beyond his public attempts to reassure the business community that the government was aware of its concerns.
Goldman Sachs declined to comment.
Asked to confirm the Sky report and its contents, a Treasury spokesman said: “As you would expect, the chancellor (Hammond) regularly meets with businesses to hear their views, most recently participating in the prime minister’s business advisory group and hosting a roundtable with asset managers.”
Banks are keen to see transitional arrangements put in place to give them time to adapt to the huge legal and regulatory change Brexit is likely to bring.
But while Prime Minister Theresa May has said she wants a “phased process of implementation” to smooth the country’s path out of the EU, many in her party fear a lengthy transition period could be used to water down or block Britain’s eventual exit.
Hammond, who is seen as one of the most pro-European members of May’s cabinet, said on Sunday that the majority of senior ministers now agreed on the need for a transition period. Leading Brexiteer Michael Gove endorsed that view on Friday.
However, in response to the uncertainty over what the transition will look like, international banks are planning to set up subsidiaries in the EU to ensure they can continue to serve clients if their London operations lose the ability to operate across the bloc once Britain leaves in March 2019.
Bank of America on Friday became the first Wall Street lender to pick Dublin as its new base for its European Union operations.
Goldman has not formally announced any similar plans but Blankfein has previously said he would like to see an implementation period of at least “a couple of years” once the British exit deal is agreed.
He has said the bank has “contingency plans” to move people depending on the outcome of the negotiations.