The specter of Brexit has caused lenders to dramatically shift their agendas, operations, and personnel, leading to speculation that London’s days as Europe’s financial capital could be numbered. After months contemplating a move elsewhere in the UK, JPMorgan has opted to move hundreds of its staff to Dublin, Frankfurt, and Luxembourg, according to a Bloomberg report.
For the past year, European lenders based in the UK have looked beyond its borders in the hopes of setting up shop in continental Europe. The main destinations that have vaulted to the top of the shortlist include Dublin, Frankfurt, and more recently dark horse candidate Amsterdam, each presenting their own unique advantages and disadvantages.
One of the primary impetuses for the move was the British PM’s terse language that sought to end passporting rights for lenders in the UK. Such a carrot had been a strong incentive for banks, many of which are now seeking to maintain a presence in continental Europe.
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According to Daniel Pinto, leader of JPMorgan Corporate and Investment Banking: “We are going to use the three banks we already have in Europe as the anchors for our operations. We will have to move hundreds of people in the short term to be ready for day one, when negotiations finish, and then we will look at the longer-term numbers.”
Last year, JPMorgan’s CEO Jamie Dimon warned employees in the UK that as many as 4,000 could be relocated in the event of Brexit, a revelation that materialized following the country’s referendum, negotiations, and eventual triggering of Article 50. More recently back in January however, he avoided the specific figure, hinting that the number of relocated workers could be more or less, pending government negotiations.
The news comes less than a week after another lender, Deutsche Bank, revealed that it too would be supporting a move, shifting up to 4,000 employees to Frankfurt. The city boasts the infrastructure and talent to satisfy many demands for incoming banks. Given the scale of the potential exodus, it is unlikely that all banks gravitate to one city given the aforementioned issues and lack of an existent one-size-fits-all situation.
Frankfurt possesses a talented pool of workers in its own right and also benefits from its geographical position and existing economic strength. While Dublin seems to have a lack of trading talent, Frankfurt could have a dearth of actual office space and housing.