The last time there was such a flurry of noise about banking jobs moving out of London and relocating to somewhere else in the EU was the fevered run-up to the Brexit vote in June.
As the business world fretted about the risks and disruption that would follow a British exit from the EU’s single market, bankers led the way in warning of potential job losses and the likelihood that chunks of business would move to Frankfurt, Paris and beyond. Goldman Sachs and other banks were among the biggest funders of the Remain campaign.
Understandably so. The financial services industry, and foreign banks in particular, have the most to fear from the elimination of London’s position as a springboard to the rest of Europe.
After losing the referendum vote, though, Remain campaigners, especially banks, went very quiet, perhaps acknowledging that their enthusiasm for Europe had backfired amid persistent anti-bank sentiment among the general public.
Instead, banks have worked away in private on contingency plans and applications for licences to operate in other European financial hubs.
Over the past six months, most banks, it seems, have come to the conclusion that between a fifth and a quarter of their European operations in London may need to move. UK tax revenue running into hundreds of millions, if not billions, of pounds could be lost.
HSBC chief executive Stuart Gulliver on Wednesday reiterated a pre-referendum estimate that 1,000 jobs could move to Paris, adding that one-fifth of its investment bank revenues in London are at stake. UBS chairman Axel Weber suggested that about 1,000 of its 5,000 London staff could be hit by Brexit, while JPMorgan boss Jamie Dimon said 4,000 of his 16,000 London-based staff could be affected. (Goldman Sachs dismissed as “speculation” a German media report that half its 6,000 staff in London may move.)
Whether by design or by accident, bank bosses have used the annual Davos gathering of political and business leaders to start talking again about the risks to the City and its workforce.
The timing is logical enough. Following Theresa May’s outline of her priorities for Brexit talks this week, banks and other businesses finally know for sure that the government will not be trying to negotiate continued membership of the single market once outside the EU. It remains uncertain whether a deal that gives UK entities access to that market on decent terms will be feasible. But for banks, insurers and asset managers, whose lifeblood is the management of risk, alarm bells are now ringing - the contingency plans look more likely to be needed, as the chance of any deal akin to the status quo recedes.
Escalating the rhetoric again on the City’s prospective job losses may be a valid tactic to put pressure on government negotiators. But bankers are guilty once again of clumsy messaging. By voicing the warnings in Davos, among the global elite, they will do little to convince the masses that Brexit is a bad thing.
