FILE PHOTO: Skyscrapers in the financial district of the City of London are seen from City Hall in London, Britain on May 8, 2021. REUTERS / Henry Nicholls / File Photo
May 18, 2021
By Pamela Barbaglia, Tommy Wilkes and Gwénaëlle Barzic
LONDON / PARIS (Reuters) – Investment banks are moving more and more rainmakers from London to financial centers across the European Union, accelerating the pace after the pandemic and uncertainty over UK access to the bloc slowed moves.
Morgan Stanley, Barclays and Goldman Sachs are among the nimble senior bankers, according to lender sources, as European regulators urge banks to staff their EU offices and ease travel restrictions. Local attitudes have also increased.
The lack of a breakthrough in talks on a meaningful Brussels-London deal on financial services post-Brexit has added to the impetus. Client-facing bankers in London need a “supervisor” inside the block when speaking to clients, which prompts some to move to avoid this complication in closing deals.
Lifestyle choices also play a role, and dealers and other senior executives are moving too. Working from home during the pandemic allowed some bankers to move out of London for warmer continental climes, reflecting a relocation of Wall Street executives to Miami during the height of the New York COVID outbreak.
Some European bankers are now trying to make the shift permanent.
“There’s a Brexit, but not just a post-Covid phenomenon,” said Emmanuel Goldstein, managing director of Morgan Stanley in France, explaining that some French bankers were returning home after their entire career abroad.
Morgan Stanley will expand its 150-strong Paris office by 50 employees by the end of 2021 and plans to double its size by 2024 through a mix of relocations and on-site hiring when the central Parisian center expands, Goldstein said.
Pier Luigi Colizzi, Head of M&A for Europe and the Middle East at Barclays, recently moved to Milan and will lead the region’s deals team from London.
The bank has also strengthened its offices in Paris and Frankfurt with local employees and poached high-ranking M&A bankers from BNP Paribas and Greenhill & Co.
Alessandro Dusi, head of European corporate and sovereign derivatives at Goldman Sachs, has moved to Milan, where the total workforce rose from 20 in 2017 to around 60, a person familiar with the matter told Reuters. Goldman now employs 60 people in its Madrid office, twice as many as before Brexit, a second source close to the bank said.
Barclays and Goldman Sachs declined to comment.
Predictions of an exodus of tens of thousands from London after the 2016 Brexit referendum have not yet materialized – the consulting firm EY calculates that by March 7,600 jobs related to the Brexit financial services company had left London, a fraction of London’s half a million financial employees.
But bankers and analysts say many of the steps still need to be taken.
JPMorgan will move around 200 more employees from London to the EU this year, including dealers, which will result in a full relocation since the referendum to around 400 with the largest number in Paris, said a person familiar with the plans.
The financial lobby group Paris Europlace forecast in 2016 that Brexit would create 10,000 new financial jobs in Paris by 2025. To date, fewer than half of these jobs have been created, but she is sticking to her forecast.
Up to 35,000 financial jobs in London could eventually disappear, said William Wright of the New Financial think tank.
European Central Bank banking supervisor Andrea Enria said this month that he understood that the pandemic has slowed relocation and that the ECB’s goal is not to “chain people and bring them to Frankfurt”.
However, he stressed that banks need to ensure that those responsible for interacting with European clients and managing risk are in the block.
“There are banks that have done the ‘full month’ and are already there, and we are fully satisfied, and there are banks that have done a lot less,” he said.
Expectations that Frankfurt will be the biggest beneficiary to date of 7,600 Brexit job moves are confused. Paris attracts the most people, according to EY. It is estimated that 2,800 jobs have gone to Paris. Bank of America, for example, employs around 400 people in the French capital.
Other cities like Milan, Madrid and Amsterdam also attract high-profile figures as banks give employees more freedom to work.
The Bank of France’s banking regulator, ACPR, said that by December 2020, 50 UK financial firms had received approval in Paris, representing nearly 2,500 jobs transferred to the French capital and assets of at least € 170 billion. (Graphic: Paris is facing Brexit, https://graphics.reuters.com/BREXIT-BANKS/yxmvjmndopr/chart.png)
“We are seeing an acceleration in jobs in investment banking and retail after a slowdown due to COVID,” said Arnaud de Bresson, managing director of Paris Europlace, adding that banker Paris because of its proximity to London, its lifestyle and its “capital markets culture.” . “
Morgan Stanley’s Goldstein said there was “a new attraction” to working in France today, suggesting a more business-friendly climate under President Emmanuel Macron.
According to estimates by the city of Frankfurt, 2,000 new jobs will be created in connection with Brexit by the end of 2022, compared to 1,500 new jobs in Frankfurt by the end of 2019.
A senior banker at UBS said some employees were more likely to move to Italy or the Netherlands than Frankfurt for personal reasons, and the city’s bland image and relatively small size did not help.
“We have to do more to promote it,” said the banker.
Bankers say they have struggled to find adequately qualified staff in Frankfurt and the inexperience of German regulators vis-à-vis French regulators in overseeing several large investment banks has frustrated some American banks in particular.
Nevertheless, the Frankfurt offices are also expanding their attitudes. Andreas Halin, founder of Global Mind Executive Search Consultants, said senior bankers had realized that they “couldn’t hide behind COVID” and were under regulatory pressure to increase the number of Frankfurt employees.
While Paris is one step ahead when it comes to staffing, no single EU capital market hub has emerged in any city.
Germany is the preferred destination for legal banks in the EU, while Paris has gained trade-related businesses. Amsterdam has gained much of the stock and swap trading from London, as well as trading platforms, but few new jobs.
New York has now become the global winner in derivatives, gaining a larger volume of interest rate swap trading leaving London than the EU.
(Additional reporting by Huw Jones in London and Tom Sims and Patricia Uhlig in Frankfurt; editing by Rachel Armstrong and Elaine Hardcastle)
This article originally appeared on www.oann.com