'More UK jobs heading for France', claims bank boss

Brexit has resulted in almost 2,500 jobs relocating from London to Paris, along with "at least €170 billion in assets", according to the governor of the Bank of France.

David Sapsted

20 January 2021

Francois Villeroy de Galhau said he expected more UK-based financial firms to move operations to France this year as he revealed that about 50 London firms had now been granted French operating licences.Many UK-based firms in the financial sector have already opened post-Brexit hubs in the likes of Frankfurt, Dublin, Luxembourg and Amsterdam to enable them to retain unfettered market access across the EU, with EY estimating that £1.2 trillion in assets and some 7,500 jobs transferred to eurozone nations before the end of the transition period at the end of last month.Mr de Galhau said: “Other relocations are expected and should accelerate over the course of the year."In spite of the pandemic, almost 2,500 jobs have already been transferred and around 50 British entities have authorised the relocation of at least €170 billion in assets to France at the end of 2020."He added that Brexit offered an opportunity for the EU to create a functional "union of capital markets" and reinforce its market autonomy, in particular for the clearing of interest rate derivatives, which has until now been concentrated in London.Asset managers in Britain are still uncertain about what the future holds for the City of London and are awaiting the outcome of talks between the UK and EU on a deal, due to be agreed in March, on regulatory co-operation and equivalence.

Patrick Thomson, EMEA chief executive at JP Morgan Asset Management, told Investment Week that the City was ready to explore opportunities post-Brexit."We believe the UK can maintain a leading role in the asset management sector given the demand for international and domestic financial services products, as well as contribute to the development of international regulatory standards," he said."The Chancellor (Rishi Sunak) has stated his intention for the UK to be open for business which is a very welcome message for international asset management firms to continue to invest in their operations in the UK. "It will be important that the regulatory agenda matches this ambition. And while the recently agreed Brexit trade deal is limited in its coverage of financial services, it creates a solid platform on which to build a co-operative, new relationship."This will be important for avoiding unnecessary market fragmentation which, we believe, is not in the interest of investors."Bob Wigley, the head of UK Finance, added: "It will be important to build on foundations of this trade deal by strengthening arrangements for future trade in financial services."