Investment banks pledge to help City of London retain top status in wake of Brexit vote
A number of international investment banks have pledged to help the City of London retain its status as the world’s number one financial centre in the wake of the shock Brexit vote, despite fears of a financial services jobs exodus from the capital.
In a statement organised by the Chancellor the Exchequer George Osborne, the banking chiefs, including Michael Sherwood of Goldman Sachs and Bill Winters of Standard Chartered, say the Brexit vote “clearly presents economic challenges” but that they have a “common aim to help London retain its position as the leading international financial centre”.
Praising the City’s advantages the statement said: “It has one of the most stable legal systems in the world, a brilliant workforce and deep, liquid capital markets unmatched anywhere else in Europe, all of which are underpinned by world class regulators.”
However, the statement – which is also signed by senior representatives of JP Morgan, Bank of America, Morgan Stanley and Citi – stops short of saying that the institutions will not move jobs and operations out of the UK capital.
The future of global investment banks in London has been intensively scrutinised due to fears they could ultimately be stripped their “passporting” rights post Brexit, which enable them to sell financial services across the 28 member bloc while their Europan subsidiaries are headquartered in the UK capital.
The chief executive of JP Morgan, Jamie Dimon explicitly warned before the referendum that the giant Wall Street bank could move up to 4,000 jobs out of the UK and into continental Europe in the event of Brexit.
Other bank chiefs made similar warnings, although the banks themselves did not make any comment in the immediate wake of the vote, saying they would wait to see the likely shape of the UK’s future relations with the EU.
UK ministers will be keen to preserve these banks’ passporting rights in negotiations with the EU, although it is very far from clear that other EU leaders would agree.
The French prime minister Manuel Valls has, since the 23 June vote, attempted to tempt London-based international banks to relocate to Paris, saying he wants the French city to be “the financial capital of the future”.
A new survey of leading bankers around the world by Boston Consulting Group suggests that 80,000 banking and finance jobs could ultimately leave London for Europe in the wake of the Brexit vote, creating more employment damage for the capital than the 2008-09 global financial crisis.
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“Britain’s decision to leave the EU clearly presents economic challenges which we are determined to work together to meet.
We will also work together to identify the new opportunities that may now become available so that Britain remains one of the most attractive places in the world to do business.
One of Britain’s key economic strengths is that it is a world leading financial centre.
It has one of the most stable legal systems in the world, a brilliant workforce and deep, liquid capital markets unmatched anywhere else in Europe, all of which are underpinned by world class regulators.
In recent years it has established itself as a global hub for renminbi, rupee, Islamic finance and green finance, as well as leading in new markets such as FinTech.
Today we met and agreed that we would work together to build on all this with a common aim to help London retain its position as the leading international financial centre.”
Signatories and attendees
Chancellor of the Exchequer, George Osborne
Mr Bill Winters, CBE, (Group Chief Executive, Standard Chartered)
Mr Michael Sherwood, (Vice Chairman and co-CEO, Goldman Sachs International)
Mr Alex Wilmot-Sitwell, (President (Europe and Emerging markets excl. Asia), Bank of America Merrill Lynch)
Mr Robert Rooney, (CEO, Morgan Stanley International)
Mr Viswas Raghavan, (Deputy CEO and Head of Investment Banking (EMEA), JP Morgan)
Mr Jim Cowles, (CEO, Europe, Middle East and Africa, Citi)