Major City employers are expected to decide within weeks whether they need to move business out of the UK as a result of the Brexit vote, the lobby group for Paris has predicted as it sets it sights on luring up to 20,000 roles away from London.
The French capital is competing to pick up any business lost by the City as a result of the UK’s vote to leave the EU. Frankfurt and Dublin are among the other EU cities seeking to attract business and jobs from London.
Europlace, the French lobby group, is setting out its stall on the basis it already employs 180,000 financiers – more than Frankfurt and Dublin combined – and says it has the skills required to rehouse financial operations.
In the run-up to the 23 June referendum, banks warned they might have to move business in the event of a vote to leave. Paris was mentioned by Britain’s biggest bank, HSBC, which said it could shift 1,000 roles there. The US bank JP Morgan said it could move 4,000 of its 19,000 UK workforce but did not specify where the roles might go. Barclays already has a subsidiary in Dublin.
Arnaud de Bresson, Europlace’s managing director, told Bloomberg that decisions would be made shortly. “We feel decisions will be taken in the first semester of the new year … We see institutions are accelerating their process of thinking,” he said.
Theresa May has pledged to trigger article 50, the formal two-year mechanism for exiting the EU, in March. The process is being watched closely by financiers who want to continue to have “passporting” access to the remaining 27 members of the EU. There have been calls for transitional arrangements to give companies time to adapt to the new trading relationships and predictions that banks could make announcements about contingency arrangements in February, when they announce their financial results.
Jamie Dimon, the chief executive of JP Morgan, said in an interview published on Tuesday that any job moves would be gradual. “We’ve been planning for a range of outcomes because it’s still as uncertain as a couple months ago. What we know now is that this will be a slow process, and all the staff moves would not happen at once but over a period of years,” Dimon told Financial News.
But he said: “If there is not a clear transitional period decided early in the process, where passporting rules still apply for a few years after negotiations, then we’d likely have to accelerate our timetable in complying with new rules.”
Dimon added: “I wish we could keep it all here [in London]. I think it’s very good for Europe. I think the efficiencies of the financial markets here accrue to Europe, too, because they get all those efficiencies embedded in how products are priced.”
Bank of England officials have said the EU as a whole could lose out as a result of Brexit, while New York, already a major financial centre, could benefit.
Dimon said he hoped “rational heads” would prevail, saying the EU had been good for peace and for economic prosperity. “A major fear to me about Brexit is that it causes the EU to fail down the road,” he said.