EU could ‘dictate’ jobs exodus from London, JP Morgan boss says

EU could ‘dictate’ jobs exodus from London, JP Morgan boss says

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Brussels will be able to “dictate” an exodus of JP Morgan bankers from Britain to the European Union as a result of Brexit, the lender’s chief executive has said.

Jamie Dimon said while he was on track to move “several hundred” of the bank’s 16,000 UK jobs to the EU after Britain’s divorce from the bloc, that number could balloon.

“If the EU determines over time that they want to start to move a lot more jobs out of London and into the EU, they can simply dictate that,” he said during a panel discussion at the Paris Europlace International Financial Forum on Tuesday.

The banking boss explained the majority of the bank’s UK operations are actually aimed at serving clients across the EU27, putting the majority of those positions at risk of being moved out of the country.

“We have 16,000 people in the UK but … 75% of that is servicing EU companies, and if regulators say one day, you know, ‘we’re not comfortable with your risk people, your lawyers, your compliance being in the UK’ they can make us move it.

“So we will simply be subject to what they do down the road.”

JP Morgan revealed earlier this year it would be anchoring its EU operations in three cities, including Dublin, Frankfurt and Luxembourg.

It is understood the majority of those jobs will settle in three cities, but others will be spread across additional JP Morgan sites across the EU where it has offices in cities including Paris, Milan, Madrid and Stockholm.

The relocation drive is expected to take place ahead of spring 2019 when the two-year window for Brexit negotiations draws to a close, and the UK is expected to lose passporting rights for financial services.

However, Mr Dimon’s comments raise the prospect of a further exodus of banking jobs to Europe after those exit talks draw to a close.

“What happens next is totally up to the EU, it’s not up to Britain,” Mr Dimon said.

JP Morgan previously indicated around 4,000 of the bank’s UK employee base could move as a result of Brexit.

EY’s Brexit Tracker released earlier this week showed 59 financial services firms are currently either reviewing their British operations or have started moving parts of their business out of the UK, up from 23 companies in March.

Insurer Legal & General said in May it plans to relocate parts of its business to Dublin, while sector peers including RSA, AIG and Hiscox have revealed a turn to Luxembourg after Brexit.

Japanese banks Daiwa and Sumitomo Mitsui Financial Group (SMFG) have also announced plans for subsidiaries in Frankfurt, while Standard Chartered confirmed in May it had contacted the local regulator about setting up its own subsidiary in the German city, where it already has a presence.

EY noted 23 major banks, asset managers and insurers have now established or bolstered their EU subsidiaries in reaction to Brexit, up from 18 three months ago.

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