Deutsche Bank has warned that up to 4,000 UK jobs could be lost as a result of Brexit, according to Bloomberg. The German bank, which recently entered negotiations to lease office space for a new London headquarters, is calling on the British government to provide some clarity about the how the UK’s departure from Europe will affect the banking industry.
“For front office people, if you want to deal with an EU client, you need to be based in the EU, does it mean I have to move all the front office people to Germany or not? We’re speaking of 2,000 people,” said Sylvie Matherat, Deutsche Bank’s chief regulatory officer in Frankfurt on Wednesday. “Then you have the local supervisors who rightly say, come on, if you have your client here, if you book your operation here, you need to have your risk management capacity here. It means another 2,000 people,” Matherat added.
Deutsche Bank currently employs 7,000 people in London and 9,000 throughout the UK. JP Morgan, UBS, Morgan Stanley and Goldman Sachs have announced their intention to move some of their operations to other locations within the EU as a result of Brexit. Frankfurt, Paris, Amsterdam and Dublin are all expected to benefit from any exodus of jobs from London should lending institutions begin to move their operations closer to the heart of Europe. In a further blow to the UK’s financial industry Manfred Weber, the leader of the centre-right European People’s Party in the European parliament – to which German Chancellor Angela Merkel and Commission President Jean-Claude Juncker both belong – said that London could not retain its position as the centre for euro-denominated clearing after Brexit, according to the Guardian newspaper. Speaking to reporters at a conference in Strasbourg on Tuesday Weber said, “When the UK is leaving the European Union it is not thinkable that at the end the whole euro business is managed in London. This is an external place, this is not an EU place anymore. The euro business should be managed on EU soil.”
The loss of these clearing houses from London would see around 100,000 jobs go with them, dealing a significant blow to the UK economy. The financial sector accounts for 12% of the UK’s GDP, contributing around £190 billion a year to the exchequer and employing some 360,000 people in the City of London alone.