It has been roughly one month since the Brexit referendum took place, and despite markets, venues, and banks having had time to prepare and process the finality, adjustments are still being made. One of the biggest upheavals has been seen across the UK’s banking industry, which had already been vulnerable due to sagging profit margins and waning revenues.
Since last October, leading investment banks in the UK such as Deutsche Bank, Standard Chartered and Barclays, among others, have been embarking on a broad-based strategy to cut costs, which saw the jettisoning of thousands of back office, technology, and trading jobs in the UK alone – regions as far away as Latin America (LATAM) also saw losses.
The Road Less Traveled
With so many job losses, many have wondered where the flow of personnel and labor would end up. To date, many new jobs have been created in Asia, long seen as the future growth hub for many lenders. However, UK banks may not have to look very far, as Luxembourg has surfaced as a plausible and conducive destination for talent.
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The small country has operated as a rock-solid financial center, which unlike the UK in the midst of secession talks, is firmly entrenched in the EU core. Moreover, the group stands to serve as an epicenter for London-based banks that may be required to move employees to maintain continued access to the European Union’s single market post Brexit.
According to Luxembourg Finance Minister Pierre Gramegna in a recent interview to Bloomberg TV regarding the country’s prospects for incoming personnel: “We are an important international financial center. After London, we are the first and obvious choice. We have already many British players in our country.”
“For banks and financial players, our message is: we do not come here to lure business away from London, we come here to continue to do business with London. We are partnering up. We’ve been doing good business together in many areas, in particular investment funds,” Gramegna explained.