Brexit is still two years away but the mass departure of finance-related jobs has been set into motion as largest global banks in London are planning to move jobs to the continent already in the next two years.
According to separate reports by Oliver Wyman and Ernst & Young, possible estimates for finance job losses due to Brexit are on wide scale from 4,000 to 232,000.
Banks are moving with caution, performing two-stage contingency plans in order to prevent losing worried London-based personnel while they work out how many jobs will have to move in the end.
This would imply that the figures could likely go up further depending on what agreement will eventually be made between the European Union (EU) and Britain.
The first part involves small numbers to make sure the necessary licenses, technology and infrastructure are in position, while the next will rely on the longer term plan of a bank’s European business.
The Bank of England has given finance corporations until July 14 to get started on their plans.
JPMorgan stated it plans last week to move between 500 to 1,000 jobs to three European cities specifically Dublin, Frankfurt and Luxembourg in the next two years which was still notably smaller than the 4,000 figure the bank’s chief executive officer Jamie Daimon first estimated before the French presidential election.
Standard Chartered which regularly conducts business in Asia followed suit with plans to strengthen its subsidiary in Frankfurt in preparation for Brexit.
The bank’s chairman Jose Vinals said that the Brexit would not oblige the Asia-orientated bank to change its UK quarters explaining that adapting its Frankfurt division into a subsidiary, which would be questioned to stricter directive, would only involve a small number of London-based staffs. It currently has about 90 employees in Frankfurt.
Frankfurt and Dublin are on the rise as the major victors from the relocation plans since six of the 13 banks chose to open a new office or moving the greater part of their business to Frankfurt while three of the banks will look to expand in Dublin.
The Deutsche Bank said on April 26 that up to 4,000 United Kindom-based jobs could be moved to Frankfurt and other locations in the EU as a result of Brexit. This was the biggest move of any bank.
Chief executive of HSBC Stuart Gulliver has said this week that the bank’s earlier estimate of about 1,000 employees would be relocated to Paris following Britain’s decision to withdraw from the EU.
Plans of large banks including Credit Suisse and Bank of America and several smaller banks are still unknown.
Thirteen of the biggest banks worldwide including Goldman Sachs, UBS and Citigroup have provided a plan on the subject of how they would build up their operations in Europe to secure market entry to the EU’s sole market once Britain separates from the union.
Discussions with financial officials in Europe have been ongoing for more than a few months nevertheless banks are completing plans to relocate staff and operations.
Even if the transfers would correspond to about 2 percent of London’s finance-related jobs, Britains tax revenues could be affected if it loses wealthy taxpayers working in financial services.
According to a think tank on budget matters, what is left of the population will have to pay more if top earners move.
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