Wall Street Banks Could Move Out Of London ASAP

Wall Street Banks and major financial institutions with operations in London recently had a closed door meeting with US Secretary of Commerce Wilbur Ross and highlighted their concerns about the potential hard Brexit and their plans to relocate operations from London.

The hushed-up meeting was held during the US secretary’s short visit to London last week, with senior executives from a number of top firms such as JPMorgan Chase, Goldman Sachs and HSBC being in attendance. The key concern expressed during the meeting was that the banks are at a loss on what UK’s financial milieu will look like when it leaves the European Union (EU).

There has been a lot of criticism about the UK government’s slow process of creating a transition deal following Brexit. But this time, the banks pointed out that their level of urgency had now reached a high point and they must quickly decide what they next step will be. With Brexit fast approaching a point of no return—these banks and financial institutions must quickly take major decisions in terms of where they must start relocating their operations, capital and infrastructure.

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They will have to decide shortly if they will go back to the US or to other European capitals. Catherine McGuinness, the policy chair of the City of London Corporation and the person in charge of the group's US delegation, highlighted the need for progress in the Brexit transition deals with the rising fear of a stock market crash happening as a result of the exit.

According to McGuinness, the next three months is especially crucial for US banks, who have already been preparing contingency plans to move their businesses out of the UK. There are reports that 10,000 jobs are expected to be moved out of UK in the short-term alone.

TheCityUK commissioned consultants Oliver Wyman to prepare a report on what impact a hard Brexit will have and the report stated that close to 75,000 jobs will be transferred out of the country due to Brexit. This figure is anticipated for a hard Brexit, if no specific UK-EU financial services deal is laid out.

In a statement, Miles Celic chief executive of TheCityUK said

It is vital that the EU and the UK avoid such a 'no deal scenario'. This outcome will see few winners, with UK and EU customers likely to bear the brunt in the form of reduced choice and cost increases

Speaking at the Confederation of British Industry (CBI)'s annual conference this week, Ross called for Britain to follow US standards post Brexit to boost trade between the nations. Whether this could help appease Wall Street banks threatening to move out of UK is still unknown, as Britain is still on the fence over a smooth transition or a hard Brexit.

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