UK Financial Services Firms continue moving jobs and assets to the EU, while calling on the Government to ensure the UK maintains a cooperative trading relationship with the bloc. According to the latest data from the EY Financial Services Brexit Tracker, 43% (95 out of 222) of Financial Services Firms have publicly stated they have moved or plan to move some UK operations and/or staff from the UK to Europe, taking the total number of job relocations since the EU Referendum to almost 7,600, up from 7,500 in October 2020. Almost 1.3 trillion pounds ($1.8 trillion) of assets have also moved, up about 100 billion pounds.
Dublin remains the most popular destination for staff relocations and new European hubs or offices, with 36 Financial Services Firms saying they are considering or have confirmed relocating UK operations and/or staff to the city. Luxembourg is the second most popular destination and has attracted 29 companies in total; 14 are wealth and asset managers and six are universal banks, investment banks or brokerages.
Professor Neil Gibson, Chief Economist with EY Ireland responded .”Our data shows that even in the grip of a pandemic, firms are still making decisions and moving people and assets to respond to the reshaped geo-political landscape,”
Some companies have pulled back from the UK as policy makers try to establish how much access to the EU’s markets London will have. Think-tank Bruegel said in 2018 that the City could ultimately lose 10,000 banking jobs and 20,000 roles in the financial services industry.
Three dozen financial services firms are considering moving some U.K. operations to the Irish capital, or have already done so, the review found. Luxembourg is second, attracting 29 companies in total, followed by Frankfurt, which has drawn 23. Twenty businesses are moving business to Paris, according to EY’s survey of public statements by 222 firms through February.
Omar Ali, EMEIA Financial Services Managing Partner for Client Services at EY, comments: “Financial Services Firms across Europe have a number of chapters still to write before they can close the book on Brexit. After the major hurdle of standing up new EU hubs, the days of significant swathes of asset and job relocation announcements appear to have passed and will likely be replaced by the slower yet ongoing movement of people and assets to Europe for compliance purposes.
Omar Ali concludes: “Specific policy work to align the UK and its closest trading partner remains crucial and will be mutually beneficial – uncertainty has been a thorn in the sector’s side for nearly five years. Firms in both the UK and the EU continue to deal with the challenges well, and the fact that no major service disruption occurred on 1 January 2021 demonstrated just how well prepared the Financial Services sector was”
“Looking ahead, the UK, as a leading global financial center, will be as focused on building relationships and competing with markets beyond European borders, as it will be on building its new relationship with the EU. There is already much activity underway as the UK redefines its future – the reviews into the UK Listing Regime and UK FinTech sector will be particularly key to its global positioning, and many eyes will be monitoring how the UK progresses new regulation on the emerging ESG and sustainable finance agendas. As all markets look to the future, the trade agreements to come will lay the foundations for a new era of global Financial Services.”