The fear of one hard Brexit fuels banks' flight from the City. The latest in chronological order was HSBC, the largest banking giant in Europe, which on Monday announced the move of the coordination of its activities on the Continent from London to Paris. In all, about a thousand jobs.
A few days earlier the same announcement had come from Deutsche Bank, which chose Frankfurt as its destination. JP Morgan and Goldman Sachs have also decided to move part of their staff, while Bank of America has already started the first two hundred moves, divided between Paris and Frankfurt. Morgan Stanley, Citigroup, Standard Chartered and Nomura have opted for Frankfurt, while Barclays has chosen Dublin.
For now, the exodus is still small, given that the finance sector employs 2,3 million people in the United Kingdom (483 in the City alone), equal to 7% of the national workforce. But in the coming months, transfers are likely to multiply.
The reason? By now the banks have little faith in the May government's negotiating skills and – also considering that time is running out: Brexit will officially start on March 19, 2019 – they do not believe in the possibility of a general agreement with Brussels before the divorce. To date, the most likely prospect is that of a separation disordered, which would mean much more difficult access to the Community market for those operating from the UK.
This is why the major companies are moving their headquarters to other EU countries (above all France, Germany and Ireland). If they did not do so, in less than a year they would run the risk of finding themselves in difficulty in managing and coordinating European activities.
At the moment, however, the picture is still uncertain. The question is at the heart of the Brexit negotiations, with London which would like to maintain at least partial access to European markets and Brussels which intends to deny it in the absence of openings on other fronts.
For this reason, of the 222 large institutions followed by the consultancy agency Ernst & Young, more than one in three is considering or has already decided to move at least part of their employees and activities from London. Mind you, the City is not on its knees yet, far from it. But the exodus has begun.
