How Brexit Is Already Taking Its Toll on Goldman Sachs, JP Morgan, Other Big Banks

Banks and other institutions from the U.S. and further afield arguably face the greatest difficulty.
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The most likely victim of the U.K.'s decision to leave the European Union, if not the economy itself, is widely expected to be Britain's banking sector.

A hub of financial activity and home to the international headquarters of many of the world's premier financial institutions, London enjoys at least some of its status as a result of its proximity to the European continent and access to consumers inside the EU.

Both British and international banks are able to operate across all countries in the EU without holding individual regulatory permissions due to the 'Financial Services Passport' they receive by virtue of being registered and regulated in London.

But Brexit means passporting is almost certain to go. As a result, banks are contemplating their operational presence in the U.K.


After much speculation that up to 4,000 jobs could go as JP Morgan CEO Jamie Dimon has kept his cards close to his chest when in public.

"The most important thing is that we will continue in every single country to serve our clients day in and day out," Dimon said.

Goldman Sachs

Goldman Sachs has been a frequent subject of speculation, with some reports suggesting it could move 350 jobs across to Frankfurt. But management are staying silent.

"I think the answer is it's just too early to tell in terms of how this process is going to unfold...we'll contingency plan for multiple outcomes" said CFO Harvey Schwartz.

Bank of America

"We've developed plans based upon various scenarios and we're just going to have to wait and see how everything unfolds to know what we're going to do," CFO Paul Donofrio warned in October 

But in February it hired real estate agents CBRE to scout for 500,000 square foot of City office space, which would house its European HQ from 2020 onwards if it decides not to renew the lease on its current site near St Paul's Cathedral.


Citigroup already has a subsidiary established in Ireland, which could be bulked up with extra people and additional capital if Brexit negotiations threaten its ability to operate across the rest of Europe.

"Brexit, hard, soft, or scrambled, is still an open question and is likely to remain so for the near future," said Michael Corbat, CEO of Citigroup.

Morgan Stanley

Morgan Stanley has said that it might need to move its European headquarters out of London if Brexit negotiations do not go the right way.

"To the extent we have to comply with obviously the Brexit rules, we'll be putting our headquarters somewhere in Continental Europe," said CEO James Gorman.


HSBC has said that it might need to move bankers out of London over the next two years, depending on the Brexit negotiation.

"Current contingency planning suggests we may need to relocate some 1,000 roles from London to Paris progressively over the next two years," said Douglas Flint, chairman of HSBC. 

Deutsche Bank

Deutsche Bank currently operate in London using the EU passport. But they'll inevitably face having to apply for a U.K. banking license in the aftermath of Brexit, if a bilateral agreement cannot be reached.

"We, in the vast, vast majority of cases, operate out of Deutsche Bank AG itself, so we're facing our clients and counterparties out of the German bank. We do add, comma, 'London branch' to our documents, but it's essentially we're dealing with DB AG," said CEO John Cryan

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