US banks deny Frankfurt move as Obama bemoans Brexit

US banking giants Goldman Sachs and Morgan Stanley have denied reports that they are preparing to relocate their London banking operations to Frankfurt in the wake of last week's referendum vote in favour of the UK leaving the European Union.

US banks at Canary Wharf
As President Barack Obama expressed fears over the effects of a Brexit on the global economy, Goldman Sachs – which had said before the vote that it could move thousands of its 6,500 staff in London to the continent in the event of a 'leave' vote – refuted media reports that it had already started renting office space in Germany's financial capital.Despite the denials, many banks, including JP Morgan and HSBC, are known to be drawing up contingency plans to move staff to the likes of Frankfurt, Paris and Dublin if the UK financial sector fails to retain unfettered access to European markets in the Brexit negotiations.In a statement, Goldman Sachs said, "We have not made any changes to our real estate requirements in Frankfurt as a result of the referendum result. As we have already communicated to our employees, there is no immediate change to the way we conduct our business or where we conduct our business."Similarly, Morgan Stanley, which has a staff of 5,000 in the UK, said it "does not have pre-let office space in Frankfurt".Meanwhile, Mr Obama has warned of "longer-term concerns about global growth" following the Brexit vote. Speaking at a summit of North American leaders in Ottawa, Canada, he pointed to the reactions in the market, stock prices and currencies to the vote.He said, "I think the preparations that were done by central banks, finance ministers and our Treasury Secretary indicate the degree to which the global economy, in the short run, will hold steady. I think there are some genuine longer-term concerns about global growth – if, in fact, Brexit goes through and that freezes the possibilities of investment in Great Britain or in Europe as a whole. At a time when global growth rates were weak already, this does not help."In the UK, motor industry leaders have stressed the "crucial" importance of the single market and European exports as new figures showed that vehicle production topped 1.7 million last year, almost 80 per cent was exported with the EU accounting for 57.5 per cent of those.The report from the Society of Motor Manufacturers and Traders (SMMT) showed that turnover of £71 billion last year was 7.3 per cent higher than in 2014, and that the industry now employs 814,000 people, though a skills shortage still meant there were 5,000 vacancies in the sector.Mike Hawes, SMMT chief executive, said, "UK automotive has gone from strength to strength and is now delivering record turnover, record productivity and more jobs."This success has been due to unrestricted access to the single market, input to EU legislation to safeguard the interests of UK automotive, and the ability to recruit talent from abroad."Our growth depends on certainty and continued open and reciprocal access to the 100-plus markets with which the UK automotive industry so successfully trades."This is not just finished cars but components, technologies and the wider automotive value chain. Any risks and uncertainty to these fundamental benefits need to be addressed head on by UK government."

 

Read analysis of what the vote to leave the EU may mean for for the global mobility industry in Brexit is a reality – a new era for global mobility? by Relocate Global's managing editor, Fiona Murchie.


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