Treasury Warned As Chancellor Fails To Organise Sit-Downs With Japanese Lenders

Treasury Warned As Chancellor Fails To Organise Sit-Downs With Japanese Lenders

The Treasury has been warned over playing City favourites after it emerged that the Chancellor has held nearly a dozen meetings with US banks since January, but failed to arrange sit-downs with Japanese lenders.

The Press Association understands that neither Philip Hammond nor Commercial Secretary Baroness Lucy Neville-Rolfe, who is meant to oversee Brexit's impact on financial services, have held any dedicated meetings with Japanese banks this year, despite threats they would start leaving London by this summer without adequate Brexit assurances.

However, Mr Hammond has held at least 10 meetings with US banks, including Goldman Sachs, Morgan Stanley and JPMorgan, since the start of the year, PA understands.

The imbalance has raised questions about the Treasury's Brexit priorities.

"Post-Brexit, we are going to be playing an independent role in the world, and that means that every third country is going to be critically important to the UK in a way that is not the case now," said Anthony Belchambers, chairman of the Financial Services Negotiation Forum, a cross-party research and advocacy group for the financial sector.

"In other words, we need to be much more focused in engaging with third countries, and that's not just the US - that is Japanese banks, Indian banks.

"US banks are important, of course they are. So this is not diminishing their role, but it's actually saying we ought to be paying a lot much more attention to other institutions who will be increasingly important to us and, hopefully, we to them."

The last ministerial-level meeting held with Japanese banking executives, in December, was attended by City Minister Simon Kirby, who was was shortly after stripped of responsibilities for overseeing Brexit's impact on financial services, which then fell to Baroness Neville-Rolfe.

Executives at that meeting, which was attended by representatives from Nomura and Daiwa, warned that they would shift operations from London within six months unless passporting for financial services was secured.

Both banks are now understood to be on track to expand operations in Frankfurt as part of Brexit contingency plans.

PA understands that lower level staff have organised meetings and been communicating with representatives from Japanese banks since the new year, but ministerial meetings have not taken place.

Mr Hammond is understood to have only held one unplanned discussion with Nomura in late April, when representatives attended a round table at a private function organised by the British Banking Association.

Nomura declined to comment.

Allie Renison, head of EU and trade policy at the Institute of Directors, said that whatever the reason that meetings have not taken place this year, she expects the Government to get dates in the diary shortly after the General Election.

"Japanese financial firms have a big footprint in London, and we would expect ministers from all relevant departments, including the Department for Exiting the EU and the Department for International Trade, to seek their views on maintaining and indeed boosting our business links with the world's third largest economy," she said.

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