JP Morgan moves staff over no-deal fears

Amid mounting fears that the UK will fail to reach a trade deal with the European Union by the time the Brexit transition period ends on December 31, JP Morgan Chase has told about 200 London-based staff that they will have to relocate to offices in Europe.

David Sapsted

21 September 2020

The move comes on the heels of a warning from the European Central Bank (ECB) that some international banks had not shifted enough people, assets and resources from London to eurozone hubs to make them ready for a post-Brexit world.Fears are growing that, in the absence of a Brexit deal, UK-based financial services will lose the 'passporting' rights that currently enable them to serve customers throughout the European Economic Area.JP Morgan, the largest US bank, has held off wholesale relocations of its 18,000-strong UK workforce but now seems unnerved over the prospects of a no-deal.Bank employees in sales and trading will now be required to sign new contracts from January 1 when they will be expected to move to offices in Paris, Frankfurt, Milan and Madrid, with the majority bound for the French capital.A report on Monday on the eFinancialCareers website said: "The move to Paris isn't likely to be entirely popular with the affected salespeople, most of whom aren't French, comparatively few of whom speak French, and many of whom will - initially at least - 'commute' back and forth to London at weekend to visit their families, something that could be complicated by quarantine restrictions."That JPMorgan has been compelled to prime its people for an imminent move reflects the deterioration in Brexit negotiations, where even the inadequate equivalence regime seems unlikely to function as hoped.

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"For the moment, JPMorgan is trying to soften the blow. The 200 London-based sales people who move are being offered six months commuting and accommodation allowances, alongside lessons in the French language."Over the summer, the ECB demanded bank chiefs submit “action plans” on how they would make their EU hubs “operationally self-standing in key areas” by the end of the year.In a statement to the Financial Times, the ECB said: “Some banks have substantially reached their target operating model already or are well on track towards that target.“There are other banks that still need to make progress, both in terms of relocating assets and staff. Our joint supervisory teams have engaged with these banks to make sure there is a shared understanding of the path towards the target operating model.”The bank also stressed “this is not about moving assets and staff alone. It is also about aiming to be structurally profitable, being operationally self-standing in key areas and most importantly not excessively reliant on back-to-back booking to the parent”.The newspaper commented that the move by the ECB "to turn the screw on lenders" had angered many in the industry. "Some bankers privately suspect this is a politically motivated way of putting pressure on the UK as trade talks with the EU enter a crucial stage," said the FT.