June 26, 2016    3 minute read

London’s Financial Power: Is This The End?

   June 26, 2016    3 minute read

London’s Financial Power: Is This The End?

UK citizens voted to leave EU, it was a controversial decision and provoked the anger of many. Many financial giants have supported the “Remain” and now that UK will leave the EU they’re planning strategies to reduce the potential damages that Brexit will provoke in Europe. Due to Brexit, London is getting ready for the departure of many bankers who will probably move their affairs Frankfurt, Paris or Dublin.

London won’t be Europe’s financial capital anymore

London, until today considered the financial capital of Europe, home to the headquarters of many European and US banks, who have always supported the campaign to remain in the EU, even financially. London has so far served as a basis for the whole European market and it is very likely that the UK out of the EU, whose precise contours are yet to be determined, will result in a forced relocation. This could have negative consequences for UK’s economy and employment, with London not being the financial capital Europe anymore there could even be a recession which could be a disaster for not only Europe’ economy but for the financial system all over the world.

The threats of many financial institutions

JP Morgan, which has 16,000 employees in the UK, could move jobs out of the United Kingdom after the outcome of the British referendum. The warning is contained in an internal email consulted by France Presse. CEO Jamie Dimon said, before the referendum, that they could move between 1,000 to 4,000 jobs. Even Morgan Stanley, according to reports by the BBC, would be ready to transfer 2,000 employees from its London office in another country after the victory of the no to Europe in the referendum on Brexit. Although the bank has denied:

“Despite the rumours circulated by the media, we have no plans to move our employees outside the UK”

James Gorman, Chief Executive of Morgan Stanley

Deutsche Bank’s CEO John Cryan said that the consequences of Brexit will be negative in every sense. The German banking giant, which employs 9,000 people in the UK, had already set up a few months ago a working group to consider the repatriation of assets, particularly in Germany. Even the British bank HSBC had suggested moving 1,000 people in Paris:

“We have a strong presence in France, we have the ability to move employees currently in London to Paris, if necessary”

Douglas Flint, Chairman of HSBC

Brexit damages: numbers and consequences

PwC estimates that Brexit could cost from 70,000 to 100,000 jobs in the financial services sector in the UK by 2020. London’s Mayor Sadiq Khan, a strong supporter of ‘Remain’, has appealed to companies to not create panic and assured that the City will remain the best place in the world to do business. But the competing cities are already stretching out the red carpet for the possible removal.

“Ready to welcome all those who want to return to Europe”

Valérie Pécresse,  President of the Ile – de -France

Get articles like this straight to your inbox each morning with our Breakfast Briefing. Sign up by clicking here!

Log in with your details


Forgot your details?

Create Account

Send this to a friend