Goldman Sachs boss Blankfein on Brexit: ‘I would have thought there would have been a worse outcome by now’

Goldman Sachs CEO Lloyd Blankfein testif
Lloyd Blankfein surprised at how little negative effect Brexit has had (Source: Getty)

Goldman Sachs chief executive Lloyd Blankfein said that he is surprised that Brexit has not had a more negative effect on the UK economy.

In an interview with Politico in Brussels today, Blankfein said that he was surprised at how little effect Brexit has had at this stage.

“I am wrong because I would have thought there would have been a worse outcome by now,” he said.

“The UK economy is slower than Europe but not by that much,” he said.

However, he said that the negative effect on the economy may have a time lag as companies make investment decisions about their future.

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“We are building a big building [in London] for more than £1bn. We are going to keep that building – the math works – but it is not the same thing as saying if we knew four years ago we wouldn’t have delayed the decision or made a different decision,” he said.

Goldman, which employs more than 6,000 people in London, is building a new headquarters on Holborn Viaduct which it plans to move into in 2019.

“I thought there would have been a more dramatic effect by now. As of now the effect hasn’t been dramatic, but you couldn’t tell from the way our building is going up – but three years from now – decisions are being made today that might result in less economic activity so there may be a lag – but at this point it hasn’t been as dramatic a fall off,” he said.

There has been a great deal of speculation that Goldman will move staff and business away from London to other European hubs such as Paris and Frankfurt.

“Brexit will require more distribution of ourselves into more places then we otherwise would have,” Blankfein said.

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“We are an industry that needs to make a pretty radical adaptation depending on the outcome. The circumstance for us is if an agreement is reached in March of 2019 we can’t start executing and organising starting in March 2019, we have different watershed moments that we need to execute certain things because they might be part of the agreement,” he said.

“Already we are going past certain deadlines, so we can’t rent real estate at the last minute, so we have taken our real estate in France, Germany and other countries, we may have to deal through different legal entities, you can’t approve those at the last moment so that has to start, we may have to deal with clients from different entities so we have to re-paper relationships,” he said.

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However, he predicted that London would remain Europe’s pre-eminent financial centre.

“This is not a winning or losing game. It might well be that the UK should remain and be encouraged to remain not the exclusive financial centre but a dominant financial centre for Europe,” he said.

Blankfein cited the experience and infrastructure available in London as an advantage in retaining its role as Europe’s chief financial hub.

“The UK has hundreds of years of experience in that and has an infrastructure and ecosystems of regulation with a lot of experience and lawyers and accountants and a lot of experience doing that,” he said.

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