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Goldman Sachs warns Brexit could stall London's dominant financial position

Friday, May 5th 2017 - 10:32 UTC
Full article 3 comments
Lloyd Blankfein also said that London's position as a dominant financial centre could “backtrack” and “stall” as a result of Britain's divorce from the EU. Lloyd Blankfein also said that London's position as a dominant financial centre could “backtrack” and “stall” as a result of Britain's divorce from the EU.
Goldman Sachs employs 6,500 people in the UK and Mr. Blankfein's comments come days after JP Morgan said it plans to move up to 1,000 London jobs Europe Goldman Sachs employs 6,500 people in the UK and Mr. Blankfein's comments come days after JP Morgan said it plans to move up to 1,000 London jobs Europe
Standard Chartered confirmed it has contacted German regulators about plans to set up a Frankfurt subsidiary that will similarly safeguard its European business. Standard Chartered confirmed it has contacted German regulators about plans to set up a Frankfurt subsidiary that will similarly safeguard its European business.

The chief executive of Goldman Sachs has warned that Brexit could see international banks reducing their footprint in Britain, and signaled the US firm has contingency plans in place to move staff out of the UK and into the EU.

 Lloyd Blankfein also said that London's position as a dominant financial centre could “backtrack” and “stall” as a result of Britain's divorce from the EU.

“A lot of people elect to have their European business concentrated in a single place, and the easiest place, certainly, for the biggest economy in the world [the US] to concentrate would be the UK - the culture, the language, the special relationship, and we are an example of that,” he told the BBC.

“And if you cannot benefit from access to the EU from the UK - and nobody knows what those rules and determinations will be - then the risk is there will be some adjustment that will cause some people to have a smaller footprint in the UK.”

“Without knowing how things will turn out we have to plan for a number of contingencies.”

Goldman Sachs employs 6,500 people in the UK and Mr. Blankfein's comments come days after JP Morgan said it plans to move up to 1,000 London jobs to Dublin, Frankfurt and Luxembourg, in a bid to secure its EU business after Brexit.

Standard Chartered also confirmed this week it has contacted German regulators about plans to set up a Frankfurt subsidiary that will similarly safeguard its European business.

Blankfein added that he favored a Brexit transition period of at least “a couple of years” once an exit deal has been agreed in 2019.

“We are talking about the long-term stability of huge economies with hundreds of millions of people and livelihoods at stake and huge gross domestic product.

”But if there is no period of time to implement whatever changes are brought about in a negotiation, we may have to do things prematurely and we may have to do a range of things as a precaution and take steps.”

To compound matters, Brexit has also put London's position as the global centre for euro clearing at risk, after the European Union confirmed it could force City clearing houses to relocate to the bloc.

The European Commission (EC) outlined fresh proposals on Thursday meant to tighten up and streamline the derivatives industry, but which also threaten London's dominance over the multi-trillion pound euro clearing market after Brexit.

Mr. Blankfein said his hope is that “we will be able to conduct our business as close as we can to the way we conduct it today. That is, we could have German nationals marketing German securities to German investors from the UK.

”And be resident in the UK and accomplish that.

“I think it is in the best interests of the UK, the best interests of Germany, to have London - which has a lot of experience about regulating these markets - continue close to that model.”

Categories: Economy, Politics, International.

Top Comments

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  • golfcronie

    Get over it we are leaving the EU. You do what you want to do, threatening us will not change anything in fact will only harden our resolve. F**king Yanks as if we care.

    May 05th, 2017 - 02:30 pm 0
  • Don Alberto

    Not to worry, the £353 million a week, which UKIP, Gisela Stuart, co-chair of Vote Leave, and the Russian chap Boris promised will save the day.

    There may be a small problem, though, as Norway's contribution to the EU in 2011 was £106 per capita, compared with the UK's net contribution of £128 per capita in the same year, according to House of Commons Library paper
    “Leaving the EU”. https://ichef.bbci.co.uk/news/624/cpsprodpb/D253/production/_89034835_uk_contributions_to_eu_budget.jpg

    May 05th, 2017 - 07:23 pm 0
  • golfcronie

    I don't think we should pay anything until the EU audits their accounts and see where the money is going.

    May 07th, 2017 - 05:33 pm 0
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