They weren't. This was never an option for banking, it is heavily protected almost everywhere (even within the Single Market).
The issue is that the UK is a very hard market: infinite competition from startups that are well-capitalised, and huge mega-banks that invest heavily in technology and run at low cost. For example, Lloyds has £400bn in retail deposits and cost/income of ~50%...German/French banks run closer to ~75-80%. We have some laggards (RBS) but generally, it is very tough (as are the Nordics).
No, they were talking about doing that or leaving without a deal. That message didn't really change until the Chequers speech in July 2018, when no deal was essentially taken off the table.
Leaving without a deal under May was a meaningless threat. It was never going to happen and Parliament had the numbers to prevent that from logistically happening anyway.
The difference now is that Johnson has the numbers, the mandate and the will for a no-deal Brexit. And Gove has just warned businesses this is happening:
It's easy to say that with hindsight. At the time it wasn't so clear. Well, perhaps it was after the general election in '17. But then it was also clear that the political situation was very unstable and could change again at any moment, which it eventually did. It would have been pretty arrogant to presume that things were going to be business as usual.
No deal simply meant the UK would now have to negotiate hundreds and thousands of piecemeal deals instead of a single, simpler, quicker, omnibus starting deal based off existing rules.
That’s assuming the UK didn’t want famines because they couldn’t import food, didn’t want unnecessary deaths because it couldn’t get medicines, didn’t want Heathrow to shut down because planes wouldn’t be able to fly over Europe, didn’t want the bulk of their service exports which form the majority of their exports to disappear overnight etc.
The issue is that the UK is a very hard market: infinite competition from startups that are well-capitalised, and huge mega-banks that invest heavily in technology and run at low cost. For example, Lloyds has £400bn in retail deposits and cost/income of ~50%...German/French banks run closer to ~75-80%. We have some laggards (RBS) but generally, it is very tough (as are the Nordics).