Even non-EU outfits that use London as a regional headquarters would not “suffer materially” if the UK lost its cross-border financial “passport” to the EU, according to a report issued by Moody’s on Monday.

“Should the UK leave the single market as well as the EU, UK-based financial firms (including branches and subsidiaries of non-EU firms) may lose their passporting rights,” wrote Simon Ainsworth, a senior vice president at Moody’s. This would require firms to relocate operations and capital to inside the union.

However, “Moody’s considers it unlikely that all permissions granted to financial firms will be lost” because in many cases “EU law already provides for limited recognition of non-EU regulatory regimes”.

At the same, “uncertainty” over the UK’s new economic relationship with the EU means that “it is likely that some banks may choose to move some UK based activities to the EU before the UK’s withdrawal negotiations are complete,” stated Ainsworth.

The Moody’s report, “Banks--Europe: Impact on Financial Institutions’ ‘Passport’' following the UK’s exit from the EU”, was published Monday.

Shortly before the Moody’s paper was issued, the president of the Bundesbank, Germany’s central bank, said London would certainly lose its automatic access to European markets if it made a so-called “hard Brexit”. “Passporting rights are tied to the single market and would automatically cease to apply if Great Britain is no longer at least part of the European Economic Area”, Jens Weidmann, told the Guardian in an interview.

Some British businesses will relocate to the euro zone, Weidmann stated. “Frankfurt is attractive and will welcome newcomers. But I don’t expect a mass exodus from London to Frankfurt.”