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Threat Of Banks Moving Due To Brexit Significantly Reduced

There were multiple media outlets and financial analysts predicting that Brexit would result in multiple banks and financial institutions moving their operations out of London. Those predictions have now been debunked as the number of financial jobs expected to move out of London has reduced from thousands to hundreds after implications of Brexit become clearer.

TheCityUK commissioned report revealed that close to 75,000 jobs will be transferred out of the country, if no specific UK-EU financial services deal is put in place. This estimate was made last year, when discussions were going on regarding a hard Brexit.

This number has now dropped down to 10,500 jobs based on research by EY accountants. The reduction in job losses comes after British Prime Minister Theresa May and European Commission President Jean-Claude Juncker announced developments in the Brexit border deal.

BBC Newsnight

With Brexit 2019 fast approaching, more banks are finally coming to terms with what setup they’re going to adopt and how much of their operations they will need to relocate outside the UK. Latest research from the Financial Times shows that international banks are expecting to relocate fewer than 4,600 jobs out of London and move them to other cities such as Frankfurt and Dublin. This totals to only 6 percent of city staff expected to make a move.

Deutsche Bank, who had earlier announced that they are moving close to 4,000 jobs out of London, have brought down their estimates and will now move only 350 jobs by April 2019. In the case of JPMorgan, Chief Executive Jamie Dimon’s had earlier predicted that they could move up to 4,000 London jobs but that number has now dropped to just 700.

Goldman Sachs has set up a new office in Frankfurt and said less than 500 employees will be relocated from their London operations to the Frankfurt office. Goldman Sachs had earlier estimated that they would need to move nearly 1000 jobs. HSBC expects to move around 1,000 jobs, although the bank’s chief financial officer announced recently that this figure can still go down.

Some banks have become more conservative about moving people because they believe it will take time for EU operations to build up. Some also say that the real impact of UK’s breakup will be felt in the long-term.

In a statement, Rob Rooney, chief executive of Morgan Stanley International, said

The story has always been three to five years out, not what it does to the City the morning after Brexit. If people judge it by the numbers that move [immediately] afterwards, they will miss the point.

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