BlackRock and JPMorgan could help Paris steal London's financial crown after Brexit
- JPMorgan and BlackRock are poised to announce job moves to Paris, according to the FT.
- It comes as banks worry about the rising risk of a 'hard' Brexit, which would cut London-headquartered banks off from European markets.
LONDON - JPMorgan and BlackRock are poised to announce the move of jobs from London to Paris as part of preparations for Brexit, the Financial Times reported over the weekend.
The paper cited unnamed sources familiar with the financial firms' thinking. JPMorgan and BlackRock both declined to comment to Business Insider.The possible movement of jobs comes as banks increasingly fear the consequences of a so-called "hard Brexit." Once seen as highly unlikely, many senior figures in the City now worry that there is a realistic chance of Britain crashing out of the EU without a deal on their future relationship. Executives are executing back up plans to ensure their businesses are not locked out of the EU after the official Brexit date next March.
The FT warned in a separate report on Monday that banks are considering exiting the UK derivatives market for fear that they will not be allowed to access London clearing houses post-Brexit. UBS said in a note last month that it expects LCH, London's biggest clearing house, to lose at least 25% of its volumes as a result of Brexit.
Cities such as Dublin, Frankfurt, and Milan have become popular destinations as banks and trading firms look to relocate jobs to EU regulated jurisdictions. Paris appears to be a major beneficiary. Bank of America Merrill Lynch and HSBC have both said they may move 1,000 jobs each to the French capital. Around 70 asset managers are in the process of acquiring licenses to operate in France, according to the FT report, with BlackRock the biggest.
The French have been aggressively wooing financiers in the City of London since Britain votes to leave the EU in June 2016. Senior lobbyists and politicians from Paris said last year that 10,000 jobs in the financial sector could migrate to the City from London as a result of Brexit.
Executives from JPMorgan, Citi, and Barclays Ireland played down job move fears in a recent evidence session for UK MPs. The three banks said they expect job moves in the hundreds in the immediate wake of Brexit. But JPMorgan's Mark Garvin warned that the figures he offered were just "day one" moves and he can "envision a scenario where those numbers could be substantially larger."