Under the title ‘Brexit – the final countdown’ and with just over one year left until ‘Brexit date’ on 29 March 2019, the ACT breakfast briefing on 1 March centred around the key question: what will Brexit mean for corporate treasurers?
Well worth venturing out in the snow for
This was the succinct description of the event by one of the delegates. And despite what were probably the most adverse weather conditions in which the ACT has ever run an event in London, the very respectable delegate turnout proved once again our membership’s high interest in Brexit implications on corporate treasury.
Cicero Group kindly offered to host this event and Cicero’s Iain Anderson, Executive Chairman and John Rowland, Executive Director kicked off with an outlook on the political trajectory ahead of us. In an excellent and entertaining presentation, Iain and John summarised the big picture and led us through all the key points worth keeping in mind. From “paralysis of analysis in the government”, the question of whether Theresa May will survive, Corbyn’s potential attempt to topple the government and the possibility of Scotland considering independence again, everything was covered. To manage expectations, John warned the audience that those hoping for more clarity and an agreement in March may well be disappointed and concluded with a helpful reminder that “the UK is not Canada”, even if a Canada-style relationship with the EU currently seems to be the most likely outcome of Brexit negotiations (and the current temperature and snow levels understandably remind us of Canada!)
To bring it all together: you’re not preparing unless you’re preparing for a harder landing
This was Iain's conclusion, which provided a perfect transition to the second part of the breakfast briefing: a panel debate centred around the key question of how corporates can prepare for Brexit.
Moderated by Michelle Price, Associate Policy & Technical Director at the ACT, the panel of experts – including Nick Burge (Lloyds Bank), Andrew Gray (PwC) and Lionel Taylor (Trade Advisory Network) – focused on the key concerns from a corporate treasury perspective.
Visibility of banks’ movements with regards to Brexit stood out as a main issue for corporates, with the bottom line being that everybody is moving at the same time in a relatively uncoordinated way.
Nick Burge, speaking on the panel in his capacity as chair of AFME’s (Association for Financial Markets in Europe) Brexit working group, highlighted the fact that banks are required by the regulator to prepare for ‘the worst case’, something hardly anyone wants to happen. Banks are planning, but they are also delaying implementation, as the working assumption is still that there will be a period of transition. Andrew Gray agreed, stressing that while banks are required to plan and prepare, everyone is deferring action for as long as possible. Which again, isn’t helpful in terms of corporate visibility of banks’ movements.
The panel discussion also touched on Brexit implications on corporate supply chains, what services and products banks will be able and willing (!) to offer to corporates post-Brexit, and the increased cost due to bank restructuring.
Not losing sight of what matters to our membership, event chair Michelle asked whether the increased cost will be passed on to corporates. And the panellists’ answer stopped just short of a clear yes: “Well, the cost is going to go somewhere…”
Many more questions remain, and this will likely not be our last event focusing on Brexit, but in the meantime, we’d encourage everyone to have a look at the dedicated Brexit resource page for corporate treasurers which the ACT’s Policy and Technical Team have put together.
And if you have any specific Brexit questions that you think the ACT team may be able to assist with, please drop us an email at technical@treasurers.org and we’ll do our best to point you in the right direction.
