Global banks be­gin mak­ing Brexit plans

The Star Early Edition - - INTERNATIONAL - Pamela Barbaglia and Arno Schuetze

US BANKS Mor­gan Stan­ley and Cit­i­group had iden­ti­fied many of the roles that would need to be moved from Bri­tain fol­low­ing its exit from the EU, sources in­volved in the pro­cesses said.

Mor­gan Stan­ley, which bases the bulk of its Euro­pean staff in Bri­tain, will have to move up to 1 000 jobs in sales and trad­ing, risk man­age­ment, le­gal and com­pli­ance to lo­ca­tions over­seas, ac­cord­ing to one source.

Cit­i­group, which has a large unit in Dublin, will need to shift 100 po­si­tions in its sales and trad­ing busi­ness, sources with knowl­edge of the mat­ter said.

Lead­ing fi­nan­cial firms warned for months be­fore last June’s Brexit ref­er­en­dum that they would have to move some jobs if there was a leave vote, and have been work­ing on plans for how they would do so for the past six months.

End to ‘pass­port­ing’

More de­tails are start­ing to emerge af­ter Prime Min­is­ter Theresa May con­firmed Bri­tain would leave the Euro­pean sin­gle mar­ket, end­ing banks’ hopes they might re­tain “pass­port­ing” rights that let them sell ser­vices across the EU out of London.

HSBC and UBS said on Wed­nes­day they could each move about 1 000 jobs out of London.

A spokesper­son for Mor­gan Stan­ley said no de­ci­sions had been taken on its Brexit plans.

“Our fo­cus is on en­sur­ing that we can con­tinue to ser­vice our clients what­ever the Brexit out­come,” he said. “To that end, we con­tinue to eval­u­ate what changes we may need to make to our busi­ness.”

A spokesper­son for Cit­i­group de­clined to com­ment.

Mor­gan Stan­ley bases the vast ma­jor­ity of its Euro­pean staff in Bri­tain, em­ploy­ing about 6 000 peo­ple there.

To con­tinue cer­tain busi­nesses such as trad­ing Euro­pean se­cu­ri­ties it will need to shift those op­er­a­tions to a li­censed en­tity in the bloc.

The source said that given the bank al­ready had a trad­ing li­cence in Frank­furt, it was likely to move most of these jobs there de­spite some of the city’s other draw­backs.

“We don’t like Frank­furt but that’s the only place to go,” the source said. “Cul­tur­ally, it’s not a vi­brant city.”

The source added that US reg­u­la­tors were ex­pected to dis­cour­age US banks from mov­ing to coun­tries with a poor coun­try credit rat­ing such as Ire­land and Spain.

Mor­gan Stan­ley chair­man and chief ex­ec­u­tive James Gor­man said this week that Brexit was “a mov­ing chess­board”.

“We like the UK, we like the rule of law in the UK, our as­pi­ra­tion is to keep as much of our busi­ness there as pos­si­ble,” he said. “But to the ex­tent we have to com­ply with, ob­vi­ously, the Brexit rules, we’ll be putting a head­quar­ters some­where in con­ti­nen­tal Europe and that will have some im­pli­ca­tions go­ing for­ward.” – Reuters

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