The United Kingdom will soon settle the debate to quit the European Union with a vote, but the ramifications of the decision will be felt by banks far outside Europe.
Banks in the U.S. that have operations in the EU will have a new headache in an already-difficult year should U.K. voters opt out of the political and economic union. And most of the biggest banks operating on Wall Street have key operations in places like London and Ireland, which could turn into a management nightmare instantly should U.K. residents vote June 23 to opt out of the governing collective.
U.S. and European banks alike that benefited from "passporting" regulations that let them run trading operations in U.K. locations like London would have to hastily revisit those operating plans, one analyst says. Some banks may consider relocating trading operations to cities like Amsterdam or Frankfurt if the U.K. opts out of the EU.
"At the moment they can run operations out of London," said George Karamanos, head of European bank equity research at Keefe, Bruyette and Woods. "If they lose that, it means that no longer can they run regulated activities out of London."