Global banks seek to reassure after Brexit vote

By: | Published: June 25, 2016 12:30 AM

Global banks sought to reassure investors and clients today that they will absorb the impact of Britain's vote to leave the EU, with US giant JPMorgan warning that financial sector jobs may leave Britain.

Global banks sought to reassure investors and clients today that they will absorb the impact of Britain’s vote to leave the EU, with US giant JPMorgan warning that financial sector jobs may leave Britain.

“In the months ahead… we may need to make changes to our European legal entity structure and the location of some roles,” said a JPMorgan staff memo obtained by AFP.

JPMorgan employs 16,000 people in Britain, while chairman and chief executive Jamie Dimon previously said that up to 4,000 jobs could move out of the UK.

“For the moment, we will continue to serve our clients as usual, and our operating model in the UK remains the same,” the memo said.

Earlier today, the chairman and chief executive of Goldman Sachs, Lloyd Blankfein, said the US investment bank had “been focused on planning for either referendum outcome for many months”.

Rival Morgan Stanley, while warning that “the UK’s vote to leave the European Union is a very significant decision which will have a considerable impact”, it noted “there will be time to implement any changes required to adjust” its banking business.

Like JPMorgan, major European players like HSBC and Deutsche Bank said they may need to shift activities abroad in the event of a Brexit, in a warning shot to London’s City financial district that employs tens of thousands of people.

Following an EU exit, London could shed 100,000 jobs, according to finance lobbyists TheCityUK ahead of the vote.

That is almost one in seven of the estimated 729,600 people employed by financial and related professional services in the traditional City district – and the newer Canary Wharf area that houses Britain’s biggest bank HSBC and rival Barclays.

Among the biggest fallers in European stock market trading today were banks, with shares in Barclays and Royal Bank of Scotland shedding around 20 per cent of their values.

“Banks and housebuilders have been hit particularly hard as markets try to factor in the Brexit effect on the UK economy,” said Laith Khalaf, senior analyst at stockbrokers Hargreaves Lansdown.

HSBC chairman Douglas Flint said the bank’s “commitment to British businesses, customers and staff in the UK remains undiminished”.

“We are today entering a new era for Britain and British business,” he noted.

“The work to establish fresh terms of trade with our European and global partners will be complex and time consuming,” Flint said.

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