As London based banks work out how many jobs will have to move to continental Europe as Britain exits the European Union, they are treading carefully, enacting two-stage contingency plans, to avoid losing nervous London-based staff.
Launching two years of negotiations that will shape the future of Britain and Europe as well as London's place as a global financial center, British Prime Minister Theresa May will trigger formal EU divorce proceedings on Wednesday.
The priority of investment banks will be to ensure they can continue servicing their clients across Europe after March 29, 2019 and the process of taking concrete steps to prepare for Britain being outside the bloc will also coincide with May’s move.
"Everybody is prepared for a cliff edge scenario, which means you need to more or less have, in a very short period of time, people on the ground making sure whatever happens you are set," Hubertus Vaeth, head of Frankfurt Main Finance, a group backed by local government to promote the city, said.
While the second and later phases requires longer term thinking on what the their European business will look like in the future, which is when bigger moves might take place, this first phase involves relatively small numbers to make sure the requisite licenses, technology and infrastructure are in place.
"We see a very short term dispersal of a small number of people ... in the next couple of months," Vaeth said.
Anxiety about whether they will have to consider relocating to Frankfurt, Dublin, Paris, Luxembourg or even Malta or risk losing their jobs is rising among many of the many of Britain's 2.2 million financial industry workers due to Brexit.
"If I ... stand up in front of my staff in London and say 'I'm moving 1,000 of you to Frankfurt', how many do you think will stick around?" a senior executive at a global bank said.
Decisions on whether to pay London-based staff off and hire again where any foreign operation is set up or try to move them have to be taken by employers. This means that identification of the roles that are likely to take some time and the ones that will be impacted immediately have to be made.
While it may not happen before any final deal is struck, moving significant numbers of jobs will likely form part of the final phase of adaptation to Brexit, bank executives say.
"Don't look for a 'big bang' the day after Brexit in March 2019," another senior executive at an international bank said.
"Banks will be looking to use what they have to be able to continue operating and servicing clients in the EU. The jobs that will move, the impact will be known in 2025 and 2030 not 2019," the executive added
Banks are unlikely to converge on a single city at first and are likely to want to retain some flexibility even as Europe's financial centers are fighting for the spoils of Brexit.
"There won't be a single location – country teams will likely be based more in situ," another banking source familiar with contingency plans said.
In a move that Goldman Sachs International chief Richard Gnodde called "contingency plans" for the first phase, the bank said last week it would begin by moving hundreds of people out of London. Goldman Sachs International is the European arm of the Wall Street bank.
(Source:www.reuters.com)
Launching two years of negotiations that will shape the future of Britain and Europe as well as London's place as a global financial center, British Prime Minister Theresa May will trigger formal EU divorce proceedings on Wednesday.
The priority of investment banks will be to ensure they can continue servicing their clients across Europe after March 29, 2019 and the process of taking concrete steps to prepare for Britain being outside the bloc will also coincide with May’s move.
"Everybody is prepared for a cliff edge scenario, which means you need to more or less have, in a very short period of time, people on the ground making sure whatever happens you are set," Hubertus Vaeth, head of Frankfurt Main Finance, a group backed by local government to promote the city, said.
While the second and later phases requires longer term thinking on what the their European business will look like in the future, which is when bigger moves might take place, this first phase involves relatively small numbers to make sure the requisite licenses, technology and infrastructure are in place.
"We see a very short term dispersal of a small number of people ... in the next couple of months," Vaeth said.
Anxiety about whether they will have to consider relocating to Frankfurt, Dublin, Paris, Luxembourg or even Malta or risk losing their jobs is rising among many of the many of Britain's 2.2 million financial industry workers due to Brexit.
"If I ... stand up in front of my staff in London and say 'I'm moving 1,000 of you to Frankfurt', how many do you think will stick around?" a senior executive at a global bank said.
Decisions on whether to pay London-based staff off and hire again where any foreign operation is set up or try to move them have to be taken by employers. This means that identification of the roles that are likely to take some time and the ones that will be impacted immediately have to be made.
While it may not happen before any final deal is struck, moving significant numbers of jobs will likely form part of the final phase of adaptation to Brexit, bank executives say.
"Don't look for a 'big bang' the day after Brexit in March 2019," another senior executive at an international bank said.
"Banks will be looking to use what they have to be able to continue operating and servicing clients in the EU. The jobs that will move, the impact will be known in 2025 and 2030 not 2019," the executive added
Banks are unlikely to converge on a single city at first and are likely to want to retain some flexibility even as Europe's financial centers are fighting for the spoils of Brexit.
"There won't be a single location – country teams will likely be based more in situ," another banking source familiar with contingency plans said.
In a move that Goldman Sachs International chief Richard Gnodde called "contingency plans" for the first phase, the bank said last week it would begin by moving hundreds of people out of London. Goldman Sachs International is the European arm of the Wall Street bank.
(Source:www.reuters.com)
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