JP Morgan decision on relocating staff still uncertain

The head of JP Morgan says the bank’s position on relocating thousands of staff from London to another European city because of the Brexit vote remains as uncertain as it was months ago.

JP Morgan Europe's London HQ
JP Morgan’s CEO, Jamie Dimon, who has previously said that a quarter of the bank’s 16,000 staff in the UK could be moved if Britain loses its passporting rights when it leaves the EU, told the Financial News that any relocation of staff would take place over a period of years, rather than at one fell swoop.

Relocation ‘a slow process’

Mr Dimon, who was in favour of the UK’s remaining in the EU, said, “We've been planning for a range of outcomes because it’s still as uncertain as a couple months ago. What we know now is that this will be a slow process, and all the staff moves would not happen at once but over a period of years.“If there is not a clear transitional period decided early in the process, where passporting rules still apply for a few years after negotiations, then we’d likely have to accelerate our timetable in complying with new rules.”JP Morgan is one of several banks, including HSBC and Goldman Sachs, to publicly state before June's referendum that it would move staff abroad if passporting rights – which enable financial services based mainly in London to operate freely throughout Europe – were lost as a result of the vote. Mr Dimon added, “The British people have a complete right to decide what they want to do, as do all the people in Europe, and JP Morgan will be able to adapt to whatever the UK and the EU decide. But there was a good reason for the European Union, for peace and for the economic prosperity from the common market. Those are still two good reasons.“I completely understand the frustration that it got bogged down with bureaucracy, and folks here in the UK would talk about it being anti-democratic, with people making decisions in Brussels who weren’t elected that affected Britain. And the common market isn’t everything, I completely understand that. Hopefully, rational heads will make it in a way that’s good for everybody.”

Dublin attracting interest

Meanwhile, Gerry Cross, director of policy at the Central Bank of Ireland (CBI), has said that the bank is preparing to accommodate “a significant number” of London-based financial services firms looking to move their operations to Dublin.Mr Cross said the CBI was taking a practical approach to help companies thinking about relocating. “We have seen inquiries and interest from a significant number of firms. These firms are of many different types and cover a wide range of activities,” he said.“We recognise the practical constraints that firms are facing, particularly around some of the timing issues: for example, setting up businesses in Ireland, getting authorisation, and thinking about model approval.“We have no objection to thinking constructively with firms about how this sequencing challenge might be addressed, without undermining our commitment to our responsibilities. ‘Grandfathering’ is not the most helpful concept in this context; rather, it is about having a practical approach while meeting our regulatory obligations.” Mr Cross’s remarks followed disclosures last week by Ireland’s Industrial Development Agency that more than 100 UK companies – most based in the City of London – had inquired about relocating to the Republic as a result of the referendum outcome.Mr Cross added, “There is also the important question of group-wide models and how they might operate. This can be a very complex question with many aspects, including questions of supervisory reliance.“The Central Bank of Ireland’s good and long-standing relationship with UK and other authorities means that we will be in a good position to work through these aspects effectively and efficiently.”In the Winter 2016/17 issue of Relocate magazine, David Sapsted looks at some of the key international locations bidding for a piece of the post-Brexit action, and canvasses the views of business leaders and politicians. 

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