Global banks are delaying or revising plans to move hundreds of key staff from the City of London to the EU in the coming months, as bankers and traders balk at the prospect of being confined to new post-Brexit outposts if coronavirus travel restrictions intensify.
People familiar with the situation said eurozone regulators were becoming increasingly frustrated with some banks’ delays in implementing plans to relocate UK-based staff to cities such as Frankfurt and Paris before the Brexit transition period ends on December 31.
US and European banking giants had hoped to have tied down their Brexit staff relocations by now. But bankers who had planned on commuting weekly between their new EU bases and London homes have found the pandemic makes this all but impossible.
Those moving their whole family risk being trapped far from their relatives if national borders are locked down as they were earlier in the pandemic. Even visits home are uncertain given the UK’s unpredictable list of countries whose travellers must quarantine for 14 days.
“Obviously, Covid has had an impact on how people can move,” said a person familiar with one large US bank’s relocation planning. “Some who were due to leave and commute, they may have to delay because logistically it’s difficult.”
“I have heard some people squealing about moving because of corona, but usually the bigger worry is they might just lose their job,” said one European bank executive. “The concern is you get moved to Frankfurt and then fired soon after . . . there is a level of nervousness across the industry about whether there is a sustainable level of business in the eurozone to justify them moving.”
A person at Goldman Sachs said Covid and travel restrictions were “complicating” conversations with staff who had been identified for moves from the City, but that it hoped to have about 100 staff transferred to its new EU entities by early next year.
Credit Suisse, which has already completed most of its 250-300 Brexit relocations, is considering coronavirus contingency plans for the final cohort, a person involved in the plans said. These include temporarily putting people in EU cities with fewer restrictions than the Swiss bank’s Brexit hubs in Madrid and Frankfurt.
Morgan Stanley has already moved around 60 per cent of the 150 staff who will relocate to Frankfurt, with the remainder set to go by the end of the year, a person familiar with the situation said.
Citi said the “vast majority” of departing London staff have already moved, with the remainder due to go by the end of the year. The bank is adding 150-200 roles in the EU, between new hires and transfers. A person familiar with the plans said the remaining transfers may be delayed because of Covid, although the bank believes it can serve its European clients with staff who are already in location.
“We have not set any specific deadlines or sought any specific relief, however we remain in close dialogue with our UK and European regulators both in relation to our Brexit strategy and Covid response,” a spokesperson added.
JPMorgan recently asked relocating staff to indicate by the end of October whether they still planned to move to the bank’s Paris hub in the second half of 2020. The indications will not be binding, but reflect an increased urgency to work out who is staying and going.
“We’re at the point now where we need to lock people down — are they going or not going, [as] we will need a person in Paris [doing their job],” one executive said.
JPMorgan staff are being asked for information about any issues that could affect their decision, including jobs for partners and schools, and the bank said it would be understanding of people whose decision changes because of those issues. These moves are in addition to the 200 staff who were recently asked to go to the continent in JPMorgan’s first wave of transfers.
An executive at a French bank said coronavirus was a “mess” for them as they juggled operations between London and Paris. “It is very difficult, we have stopped travelling for the most part,” he said. “We have to see if we are done with Brexit relocations; I am not sure everything is over, we have to see what the deal is.”
Another bank said that regulators were “cognisant” of the difficulties created by the pandemic and were giving banking groups leeway. Andrea Enria, chairman of the ECB’s supervisory board, said in an interview on Friday that the banks “have moved significantly in the right direction” on their Brexit plans.
Behind the scenes, ECB officials are becoming increasingly frustrated with delays and suspect some banks are using the pandemic and restrictions imposed owing to rising infections as an excuse to delay moving key personnel.
Some banks have already completed their Brexit moves, including Bank of America, which has already transferred 450 people, and Barclays, which has moved 300 to Dublin and has another 1,500 working across the EU.
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