Up to 40,000 banking jobs could be uprooted from the City of London because of Brexit and related issues such as euro clearing relocation, a new report has warned.
Consultancy firm Oliver Wyman has previously estimated that a so-called hard Brexit, “in which UK-based banks lost privileged access to the EU”, would drive between 31,000 and 35,000 financial services jobs out of the UK. Between 12,000 and 17,000 of the positions would be in banking.
In a report out today it restated those figures, but also warned that the movement of jobs “could ultimately be greater”.
The report said:
The EU faces a number of broader policy questions about the future structure of the euro financial system and whether elements of it, such as clearing, can continue to be provided from London.
We continue to estimate that such a long-term shift in the wider financial markets ecosystem towards the EU could move around 35,000–40,000 jobs from the UK to the EU in wholesale banking alone.
The consultancy also said a smaller factor could be management teams finding commercial reasons for more relocation, “for example to encourage collaboration among salespeople, traders and risk managers, while maintaining close proximity to clients”.
The report also today warned that Brexit could push up banks’ annual costs by between two and four per cent, equivalent to $1bn across the industry, and capital requirements by between 15 and 30 per cent.