Banks may quit Britain without post-Brexit plan, Sir Howard Davies warns

The chairman of Royal Bank of Scotland has warned that banks could pull out of Britain if a post-Brexit plan is not secured.

Sir Howard Davies told Peston on Sunday that American and Japanese banks are worried by the prospect of a "hard Brexit".

He warned that some of the banks are now drawing up contingency plans.

Sir Howard urged Theresa May to offer the City reassurances 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 Europe.

Jobs could potentially be lost to Europe and Ireland, Sir Howard told Peston on Sunday.

"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.

"And therefore I think that it is quite urgent".

Sir Howard said that the best way to offset any uncertainty was for the government to come up with a solid transitional plan.