London - The largest global banks in London
plan to move about 9 000 jobs to the continent in the next two
years, public statements and information from sources shows, as
the exodus of finance jobs starts to take shape.
Last week Standard Chartered and JPMorgan
were the latest global banks to outline plans for their European
operations after Brexit. They are among a growing number of
lenders pushing ahead with plans to move operations from London.
Goldman Sachs chief executive Lloyd Blankfein said in
an interview on Friday that London's growth as a financial
centre could "stall" as a result of the upheaval caused by
Brexit.
Thirteen major banks including Goldman Sachs, UBS,
and Citigroup have given an indication of how they would
bulk up their operations in Europe to secure market access to
the European Union's single market when Britain leaves the bloc.
Talks with financial authorities in Europe have been
underway for several months, but banks are increasingly firming
up plans to move staff and operations.
"It's full speed ahead. We are in full motion with our
contingency planning," said the head of investment banking at
one global bank in London. "There's no waiting."
Although the moves would represent about 2 percent of
London's finance jobs, Britain's tax revenues could be hit if it
loses rich taxpayers working in financial services.
The Institute for Fiscal Studies - a think tank focused on
budget issues - said in a report on Thursday the rest of the
population will have to pay more if top earners move.
The exact number of jobs to leave will depend on the deal
the British government strikes with the EU. Some politicians say
bankers have exaggerated the threat to the economy from Brexit.
The plans of large banks such as Credit Suisse and Bank of
America and many smaller banks are still unknown.
Frankfurt and Dublin are emerging as the biggest winners
from the relocation plans. Six of the 13 banks favour opening a
new office or moving the bulk their operations to Frankfurt.
Three of the banks will look to expand in Dublin.
Deutsche Bank said on Apr. 26 up to 4 000 UK jobs
could be moved to Frankfurt and other locations in the EU as a
result of Brexit - the largest potential move of any bank.
JPMorgan last week announced plans to move hundreds of roles
to three European cities in the next two years. This is still
significantly lower than the 4 000 figure JPMorgan CEO Jamie
Dimon first estimated before the vote.
Estimates for possible finance-related job losses from
Brexit are on a broad range from 4 000 to 232 000, according to
separate reports by Oliver Wyman and Ernst & Young.
Banks are treading carefully, enacting two-stage contingency
plans, to avoid losing nervous London-based staff as they work
out how many jobs will have to eventually move.
This suggests that the numbers could potentially rise
further depending on what deal is eventually negotiated between
the EU and Britain.
This first phase involves small numbers to make sure the
requisite licences, technology and infrastructure are in place,
while the next will depend on the longer term strategy of a
bank's European business.
The Bank of England has given finance companies until July
14 to set out their plans.
One senior bank executive at a large British bank said
forcing companies to make a plan makes it more likely that they
will follow through.
"It is an unintended consequence, but the more and more
preparation you do the more likely you are to execute those
plans," the executive said.
HSBC Chief Executive Stuart Gulliver said this week that the
bank's previous estimate that around 1000 staff would move to
Paris following Britain's vote to leave the EU, was based on a
'hard Brexit' scenario.
Most banks are working on the assumption that this is the
most likely outcome of the separation talks and would involve
losing access to the single market with no special financial
services deal and no transition period.