JP Morgan shifts €200bn in assets from UK to Germany
JP MORGAN is moving about €200bn (£184bn) of assets from the UK to Germany, with only a little over three months until the Brexit transition period ends.
The Wall Street bank plans to finish moving assets to its Frankfurt-based subsidiary by the end of the year, Bloomberg reported.
Separately, it emerged last night that JP Morgan is set to pay nearly $1bn (£785m) to settle investigations into alleged market manipulation in the US.
Back on this side of the Atlantic, the shift in assets will make JP Morgan one of the biggest banks in Germany, and could raise concerns that London’s position as Europe’s top financial centre will be weakened by Brexit.
International banks have been moving assets and making changes to their operations to ensure they can continue to function fully if there is no deal between the UK and the EU on market access once the transition period ends at the turn of the year.
However, the number of job losses in the City as a result of Brexit has so far been lower than previously feared.
JP Morgan already books transactions for some of its European clients through its German subsidiary. But is understood to be increasing the capital in its Frankfurt entity in preparation for the end of the Brexit transition.
It is understood that the bank plans to route more transactions through Frankfurt from next year.
The changes will not have any bearing on jobs, a source close to the bank said. However, about 200 of its 12,000 London staff were told last week to move to European cities including Paris, Frankfurt, Milan and Madrid.
Citi, UBS and Standard Chartered are among the financial institutions that have expanded their Frankfurt operations ahead of the UK’s new trading relationship with the EU. A spokesman for JP Morgan declined to comment.
Separately, the Financial Conduct Authority (FCA) launched a consultation on how to regulate financial services firms based in the European Economic Area from next year.
More than 1,500 firms and about 600 funds have registered under the UK’s temporary permissions regime. The watchdog said it expected the number of international firms seeking authorisation to increase following the transition period. Simon Morris, a financial services partner at law firm CMS, said: “This consultation reflects the FCA’s and the Government’s ‘open door’ approach and contrasts with the EU’s increasingly protectionist stance.”