Wall Street giants resist Brussels’ efforts to siphon jobs from City

‘We want to ensure that risk management arrangements are commensurate with the risk they originate’

BRUSSELS is facing a backlash from Wall Street banks over its plot to siphon jobs from the City after Brexit failed to trigger a predicted exodus of top bankers from London.

US bank bosses plan to voice concerns to the European Central Bank in the coming months after it put pressure on lenders to move jobs from the UK by warning they are too dependent on operations outside of the bloc.

The ECB has conducted a major review into banks’ trading desks and how they keep top bankers outside the bloc and shift the risk of their eurozone operations to the UK.

The desk mapping review means many have to beef up their eurozone operations or face fines, with the ECB warning these “empty shell” structures are a “very real concern”.

However, banks are reluctant to shift away from London’s deeper liquidity pools and senior staff want to remain in the UK.

One US bank executive said driving staff and operations out of London will ultimately lead to worse deals for European customers and cause less efficient and effective risk management.

Another said the ECB is “getting really serious” about forcing more operations into the bloc, saying its clampdown would deal a big blow to

London. Bosses say there is a risk of the move being politicised as European countries try to lure staff and operations from London.

The ECB is said to be in “listening mode” as it awaits future plans from banks following the review.

It is understood that the Bank of England is speaking to the ECB regularly to cooperate with the review but will stop any moves it believes are politically motivated.

The ECB has warned that a fifth of trading desks investigated need “targeted supervisory action” and “banks do not yet retain full control of their balance sheets”. A blog by Andrea Enria, chair of the ECB’S supervisory board, said: “The ECB is mindful that its expectations may lead to changes to the current set-up of some banking groups and intends to apply its policy in a proportionate manner.”

He added: “We want to ensure that incoming legal entities have onshore governance and risk management arrangements that are commensurate ... with the risk they originate.”

The ECB declined to comment.