JumpinJack
DP Veteran
- Joined
- Aug 19, 2013
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US Banks Preparing to Relocate After Brexit (GS,BAM) | InvestopediaLondon is likely to lose its revered position as the world’s leading financial center as the recent Brexit vote means losing its privileged access to the EU, the world’s largest trading bloc. Major U.S. banks located in Britain have already begun preparing for the possibility that they will no longer be able to provide financial services to EU clients from their current geographic location.
Until now, banks around the world have been able to conduct business in the EU by setting up shop in the U.K., which has ‘passport’ privileges to the other 27 member nations. This is one of the primary reasons London has become not only the EU’s financial capital, but the world’s financial capital as well. (See also: The Top Three Financial Centres in the World).
Big U.S. banks were able to take advantage of the EU’s passport rules by setting up subsidiaries in Britain, offering financial services to the rest of the European continent and providing thousands of jobs in the process. In the city of London alone, Goldman Sachs Group Inc. (GS) employs 5,500; Bank of America Merrill Lynch (BAC), 4,500; Morgan Stanley (MS), 5,000; JPMorgan (JPM), 8,000; and Citicorp Inc. (C), 7,000.
Ruh-roh. The beginning of British recession may be beginning.
I don't know if Britain should have been part of the EU or not, for various reasons. But one thing seems to be certain: It was very good for the British economy. I heard that one of the main reasons people voted to exit was because of immigration, but may not have realized the impact of leaving the EU or all the benefits it had brought to their economy. Nothing is all bad or all good, of course.