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Abu Dhabi, UAETuesday 25 September 2018

US bankers threaten exodus from City after Brexit

Banks such as Goldman Sachs expressed concerns about the potential economic damage that exit from the EU might cause

Goldman Sachs was one of the banks that attended the summit with US commerce secretary Wilbur Ross. Reuters/David Gray
Goldman Sachs was one of the banks that attended the summit with US commerce secretary Wilbur Ross. Reuters/David Gray

Some of Wall Street’s most illustrious financial institutions with operations in London have warned the Trump administration that the political and economic confusion around Brexit could force them to move thousands of jobs from the City, according to a front page story in the Financial Times.

Representatives from banks such as JP Morgan Chase, Goldman Sachs and HSBC attended a closed-door meeting at a London restaurant to tell Wilbur Ross, the US commerce secretary, of their concerns about the potential economic damage that Britain’s exit from the European Union might cause.

According to unnamed sources who related the detail of the meeting to the FT, the banks expressed their concern that prime minister Theresa May will fail to secure a transition deal from the EU that will give business a further two years to deal with the aftermath of the country’s exit from the union. The bankers “warned they had even less clarity over what a final Brexit deal will look like” the newspaper reported.

Without any clear messages from the British government about what the country is planning to do in Brexit talks with the EU, the Wall Street representatives told Mr Ross that they would be forced to move jobs from the British capital, potentially to European competitors such as Paris or Frankfurt.

“There was broad discussion around the lack of progress in the Brexit talks and some discussion around various political scenarios,” one person briefed on the talks told the FT.

US banks have been scathing about the decision to seek an exit from the EU. Lloyd Blankfein, head of Goldman Sachs, penned a pointed tweet recently in which he lauded the virtues of Frankfurt and said that he would be “spending a lot more time”.

The assembled bankers told Mr Ross that with the deadline of March 2019 rapidly approaching, they would soon have to make decisions about moving their operations out of the British capital.

“The fear of a crash-out is rising,” Catherine McGuinness, policy chair of the City of London Corporation, who headed the group’s US delegation, told the newspaper. “We need action, not warm words. We really need progress.”

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