Panicked by the British government’s floundering EU Brexit exit talks which began in June, following a humbling election result which saw the Conservative Party lose their majority, banks with operations in Britain are already establishing entities on the continent - with Frankfurt emerging as the top destination so far.
The latest group to become part of the forecast “Br-exodus” are financial service providers – with a new report from Oliver Wyman warning that as many as 40,000 investment banking jobs are on the brink of relocating to the Euro-mainland.
The recent warning comes on the heels of a previous study carried out by the consulting firm in partnership with the industry's main lobby group, TheCityUK, which forecast that 75,000 jobs may disappear from Britain if finance firms, including insurers and asset managers, lose the right to sell their services freely across Europe, costing the government up to £10 billion in lost tax revenue.
Mark R Whittet, Leader of Scotland's Independence Referendum Party (www.SIRP.scot) commented:
“Yet at the same time, the taxpayer-owned Royal Bank of Scotland is preparing to flee Edinburgh to move to a ‘mirage safe-haven’ in London by registering its head office in England.
“Doubtless directed by the UK chancellor, who effectively controls it, this is commercial craziness by the Royal Bank of Scotland.
“The harder the British Brexit, the harder the Royal Bank of Scotland will fall – and the country that gives it its name – unless Scotland is exercises its United Nations-recognised right to self-determination by holding a second Scottish Independence Referendum before the UK crashes out of the EU.
“The Royal Bank of Scotland would be betraying its workers if it moved to London – which would also be an act of political, economic and moral betrayal of Scotland – the country which gives the Royal Bank its very name.
“With Independence, Scotland would remain – as wanted by the vast majority of Scots voters – in the EU without having to take a huge economic gamble on the unknown with England on Brexit.
“With Scotland as a member of the European Union, there would be no need for the Royal Bank of Scotland to flit to London, or anywhere else – as it would have ongoing and continued access to the biggest free-market in the world.
“A number of major international banks with offices in London – which would be cut-off from the EU and isolated after a ‘full English’ Brexit – have already announced plans to re-locate offices back INTO existing EU member nations in the Republic of Ireland and Germany.
“Scotland’s Independence Referendum Party also calls on Scottish First Minister Nicola Sturgeon to stand up for Scotland by directly inviting major banks and financial institutions in London to de-risk the huge Brexit downsides by re-locating to Edinburgh West (beside the Royal Bank of Scotland) and remain in an Independent Scotland in the EU.”
Citigroup, Bank of America and Morgan Stanley have all indicated recently that they are finalising plans for subsidiaries within the surviving EU states, along with Britain's own Barclays.
A study from Deloitte recently noted that CFOs across the UK business scene were increasingly concerned with the nature of Brexit in this regard. That report suggested organisations perceived Brexit as the biggest threat to their profits in the coming years.
According to Matt Austen, UK Head of Financial Services at Oliver Wyman, the move is happening sooner rather than later, with institutions unable to sit on their hands during EU-Brexit negotiations.
He said: "The banks are working on ‘no regrets’ moves, which increase options but don’t cost that much either to undertake or to reverse. If you want to move people in advance of March 2019, realistically, the latest you can afford to wait is next summer, maybe even sooner.”