Several of the world’s biggest banks are already considering sending thousands of jobs out of Britain a few months after the voters chose to leave the EU, according to the delegates of the U.K. Financial Services Brexit Summit in London.
A group of top bankers said on Tuesday that Brexit could force them to move operations and jobs from London if the country becomes unable to secure them continued easy access to the European Union’s single market.
Senior executives from European divisions of some of the world’s biggest financial institutions spoke on a panel including Banco Santander SA’s U.K. chairman, Shriti Vadera, John Nelson, chairman of the Lloyd’s of London insurance market, and Adrian Montague, chairman of Aviva Plc.
In all, the city that has long been considered the financial capital of Europe could lose as many as 40,000 workers in the wake of Brexit. Much of the exodus could come from the big U.S. banks.
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Eventual response could deepen London’s pain
Citigroup Inc.’s top banker in the U.K., James Bardrick, said the main challenge facing financial-services firms was when to trigger their contingency plans and start the process of moving abroad, following Britain’s vote in June to leave the European Union.
Rob Rooney, CEO of Morgan Stanley’s international business indicated that his bank would also have to relocate staff elsewhere in the EU if Britain failed to retain the “passporting” rights which allow them to sell financial services across the bloc.
“It really isn’t terribly complicated. If we are outside the EU and we don’t have what would be a stable and long-term commitment to access the single market then a lot of the things we do today in London, we’d have to do inside the EU 27,” he added.
Other banks have been more upfront in saying that they would have at least some of their staff exit London. Last week, Royal Bank of Canada (RBC) slashed 15 investment banking jobs in the UK. Earlier in July, JPMorgan said it could axe up to 4,000 UK jobs, while HSBC has suggested up to 1,000 posts could move to Paris.
On the other hand, the UK government’s representatives tried to calm down the heightened concerns, promising to engage constructively with the industry. Britain’s financial services minister Simon Kirby said getting the best deal for the City of London will be an “absolute priority” in Brexit trade talks with the EU.
The pound’s losses have deepened last week as U.K. politicians, led by Prime Minister Theresa May, said they would trigger the two-year process to leave the EU by the end of March. Sterling extended declines after the government appeared to prioritise capping immigration over retaining access to the single market.