Banks Are Planning A Massive Double Exit From The UK If It Votes To Leave The EU

International banks are making contingency plans for a massive exit from Britain if the country ever votes to leave the European Union in a referendum, the Financial Times reports. Bank of America Merrill Lynch, Citigroup and Morgan Stanley are all eyeing a move to Ireland, the paper reports.

Those reports come on the heels of news that banks are preparing to leave Scotland if that country's independence vote goes the "wrong" way on Sept. 18 - setting up an historic, bizarre double-exit scenario for Europe banks.

So far, banks are only considering contingencies. The Bank of England, for instance, said it will do whatever it has to do if the Scots go it alone. Nothing concrete is in place, yet.

A Scottish exit could cost the Northern nation 9% of its GDP from fleeing banks, according to the National Institute of Social and Economic Research. A British exit could cost the U.K. 12% of its tax base, the FT says.

About 250 banks have office in the U.K., mostly London, and the E.U. gives them equal, unfettered access across the borders of 27 European countries.

But Prime minister James Cameron has promised to hold a referendum on whether the U.K. should leave Europe if the Conservatives win the next election in May 2015. If Britain leaves the EU, all its companies will suddenly potentially become subject to new border restrictions, taxes and tariffs in other European countries - putting a significant drag on trade and exchange.

If the U.K. were to leave the EU - the so-called "Brexit" scenario - senior bankers worry that Britain would be unable to negotiate the same passporting rights for its financial services industry. If these were lost, it would force many corporate and investment banking operations to leave the UK. The hit to the U.K. economy could be huge: £27 billion ($45 billion) in taxes:

It is hard to argue with the importance of the financial services industry to the UK. According to the Treasury, the industry provided 1.4m jobs and paid £27.5bn in income tax and national insurance in 2011-12, or 12 per cent of the total. The International Monetary Fund says the UK is the largest net exporter of financial services, insurance and pensions in the world, with a trade surplus of $67bn in those industries. A third of that surplus came from trading with the EU.

At the same time, the Scots are preparing to vote on whether they leave the U.K. (and technically Europe too, at least temporarily). A televised debate on Scottish independence will be held Monday evening.

Read the FT's story on banks preparing to leave London here.