Sir Howard Davies said American and Japanese banks are very concerned at the prospect of a hard Brexit and are drawing up contingency plans.
He urged the Prime Minister to offer the City some reassurance and certainty by negotiating a transitional deal which will allow firms based in Britain to continue to be able to operate in the rest of the EU.
He told ITV’s Peston On Sunday show that jobs could be lost to Europe and to Ireland.
He said: “I think it is damaging if we don’t get a transitional deal because I think you will then see banks and financial institutions making decisions on the basis of uncertainty.
“They will not wait because they have to make a decision which will allow them to be, to continue to function in the event of a hard Brexit if that’s a possibility.
“So they will not sit back, they are currently making contingency plans and once you’ve got a contingency plan – hey, there is a risk you might implement it one day.
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