'Brexit' Would Seriously Harm German Banks: Watchdog

A British vote to leave the European Union would hit large German banks, given their heavy exposure to London, the head of German financial watchdog Bafin said in an interview with German newspaper Tagesspiegel, Reuters report.

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Bafin President Felix Hufeld told the newspaper in an article to be published Monday that he hoped Britons would vote to remain in the European Union.

If not, "the biggest banks would have the biggest problems," the newspaper quoted Hufeld as saying. "They have the most activities in, and with, London," he said.

Hufeld said the European Central Bank planned to closely monitor the situation and the banks themselves had internal groups looking at the possible consequences.

Deutsche Bank AG and Commerzbank AG are the German banks with the largest business dealings in Britain.

Britons are due to vote in a June 23 referendum on the country's membership in the EU, a choice with far-reaching consequences for politics, the economy, defense and diplomacy in Britain and elsewhere.