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BlackRock, Morgan Stanley Chiefs Sound Fresh Brexit Warnings

The founder and president of the world’s biggest money manager has criticized the apparent lack of truthful information circulated ahead of Britain’s vote to leave the European Union, a move he said could hurt companies all over the globe.

BlackRock’s Robert S. Kapito also suggested world leaders may want to pay more attention to the plight of ordinary citizens living outside major cities, lest they suffer the same kind of internal division and economic pressure created by the Brexit vote.

“I don’t think that people have been given enough facts before the vote as to what the unintended consequences would be,” Kapito told the BBC in an interview this morning. “And those unintended consequences are very significant and they impact everyone across the UK.”

In June, the British public voted to leave the EU by a margin of around 52% to 48%. Campaigners on both sides of the debate were widely criticized for fear-mongering, either by suggesting, for example, that Brexit would lead to economic catastrophe, or that staying in the European Union would see the UK flooded with illegal immigrants.

Citizens voting to leave the EU were largely concentrated in English regional and rural areas outside of major cities such as London.

“I don’t think that people have been given enough facts before the vote as to what the unintended consequences would be. Those unintended consequences are very significant and they impact everyone across the UK.”

“Is this a signal to the rest of the world that they’re not paying close enough attention to the general population and just to the major cities, or major financial cities or industrial cities?” Kapito asked.

BlackRock’s playing it safe, making provisions for the future
BlackRock is already planning to move staff out of London and Kapito said other CEOs should be doing so, too.

“I don’t think there is any firm—any good firm—that has not already started to look at real estate in different areas outside of the UK in case they have to move larger operations,” Kapito said.

Morgan Stanley President Colm Kelleher, meanwhile, said it was still too difficult for CEOs to determine how many staff they may have to move.

Britain hasn’t yet commenced a two-year negotiation with the EU to lay out the terms of its exit, so it’s still up in the air whether banks will be able to sell products directly to the mainland.

“I do believe, and I have said prior to the referendum, that the city of London will suffer as a result of Brexit,” Kelleher told the BBC. “The issue is how much.”

About Ross Kelly

Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.