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London – Financial services companies operating in the UK have moved around 7,500 employees and more than £ 1.2 trillion in assets to the EU ahead of Brexit, and are more likely to follow in the coming weeks, according to EY.
About 400 relocations were announced in the last month alone, the consultancy said in a report on Thursday that tracks 222 of the largest financial firms with significant operations in the UK. Since Britain voted to leave the bloc in 2016, the financial industry has added 2,850 jobs in the EU, with Dublin, Luxembourg and Frankfurt recording the biggest gains.
Starting in 2021, companies in the European financial capital will lose their passport to offer services throughout the EU. They will have to rely on the bloc giving the UK the so-called equivalency so they can do business with clients in the region, who account for up to a quarter of all revenue in London. Since the EU is far from being sure of granting such access, companies have to strengthen their continental presence.
“As we rapidly approach the end of the transition period, we are seeing some companies moving into the final phases of their Brexit planning, including relocations,” said Omar Ali, UK Financial Services Managing Partner at EY. “This is despite the pandemic and the consequent restrictions on the movement of people.” Many companies are still in a “wait and see” mode, and a series of additional moves could follow soon, according to Ali.
JPMorgan has moved both assets and staff in recent weeks, while Goldman Sachs has planned for an additional 100 people to move to Europe.
These changes are still well below some estimates made since the Brexit vote. The Bruegel think tank said in 2018 that London could ultimately lose 10,000 banking jobs and 20,000 positions in the financial services industry, while former London Stock Exchange chief Xavier Rolet said the figure could reach 232,000 jobs. .
The EY report also noted that up to 24 financial services companies have said they will transfer assets outside of the UK amid uncertainty about the nature of the City of London’s continued access to the block.
For now, London still accounts for the majority of US bank assets in Europe. The Big Five Wall Street companies backed their UK units with $ 136 billion of core capital at the end of 2019, while the figure for the EU was $ 45 billion. But more transfers are expected in the coming months.
Bloomberg
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