Brexit rebellion: Patriotic London traders quit jobs rather than face relocation to EU
Dominic Raab dismisses EU threat to City of London
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JP Morgan asked the team of about 15 derivatives traders to move to Paris to help the firm comply with post-Brexit rules to maintain access to the single market. But almost half of them walked out on the firm instead to avoid relocating to the Continent. Other investment banks have faced similar woes, with many having a hard time convincing their traders to leave London.
Stephane Rambosson, co-founder of London-based recruitment firm Vici Advisory, told Bloomberg: “I’ve got cases of people moving to the Continent and they are really not happy.”
Goldman Sachs and Nomura have also been hit by the issue as EU chiefs ramp up the pressure on banks to move staff and assets to the bloc.
Brussels is adamant that banks must move more assets, people and business from the City of London in the coming years.
Regulators, led by the European Central Bank, are pushing lenders to manage risk tied to EU clients from inside the bloc.
The ECB has launched a probe into each bank’s risk management setup in the EU in an effort to ramp up the pressure.
London is likely to remain Europe’s largest financial hub, but European rivals want to use Brexit to help bolster their own operations.
Morgan Stanley has revealed its Paris office is expected to double in size over the next two and a half years to about 300 people.
Deutsche Bank recently opted to move about 100 jobs in its corporate banking unit from London to Frankfurt and Dublin.
Staff were given an option to relocate, but had to accept a pay cut in order to keep their jobs.
The German city of Frankfurt is proving a particularly hard sell for banks trying to move their people to the Continent.
Many traders want would prefer the glitz of Paris or Milan, as well as easier transport back to London via the Eurostar.
Mr Rambosson believes EU countries, like France and Italy, will offer huge tax breaks to bring more senior leadership roles to Europe.
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“It’s definitely possible these days to not be based in London and for it not to be career-limiting,” he said.
In the almost five years following the referendum on our EU membership, eurocrats have forced banks to move thousands of jobs and hundreds of billions of pounds in assets from the City to the Continent.
UK politicians and regulators have long feared that their European counterparts are attempting to poach as much financial services business as possible under the guise of repatriating oversight of all euro-based trade.
In the past, banks used London as a hub to “passport” their financial services into the Continent.
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But Brexit means the UK has lost its unrestricted access and many lenders have been forced to set up or bolster their operations inside the EU.
Banks have so far been reluctant to push through the wholesale changes demanded by the EU amid hope a new financial services pact can be reached between Brussels and the UK.
Coronavirus has also thrown up a major issue with huge restrictions on movement still in place to curb the spread of the virus.
The ECB initially offered some leniency to banks moving staff to the Continent but it has now said the pandemic is not an excuse to further delay relocation efforts.
It is estimated that banks have moved or plan to move more than £900 billion in assets to the EU, around 10 percent of the entire UK banking system.
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