TheWeeklyMagazines News City firms made plans in Brexit run-up to move assets worth £100bn to EU – survey

battered City of London sign

London-based firms do not have an equivalence deal with their EU counterparts, putting the City at a disadvantage.
Photograph: Leon Neal/Getty Images

City firms revealed in the final months of 2020 that they planned to shift nearly £100bn in assets to the EU, taking the total value of assets lost to the bloc since the Brexit vote to £1.3 trillion, according to a new survey.

Data from EY highlights last-minute transfers in order to hold on to European business

According to EY’s latest Brexit tracker, which covered the period from October 2020 to February, firms have shifted or declared plans to move approximately £500bn worth of those assets in the last two years alone.

The data from consulting group EY pointed to a last-minute push by firms before 31 December after the UK-EU trade deal did not offer concessions for the UK’s dominant financial services sector. It forced companies to move staff and assets to the continent in order to continue serving EU customers.

It has also emerged that JP Morgan Chase was planning to relocate €200bn (£173bn) worth of assets to Germany as part of its own Brexit preparations. It is understood that process is still going on.

Goldman Sachs was among them, having shifted around $40bn-$60bn (£29bn-£43bn) worth of assets to its Frankfurt operations at the end of 2020.

However, the EY survey showed that the rate of increase of job moves slowed, with the total number of employees shifted abroad rising to nearly 7,600 from 7,500 in October.

London was dealt a blow last month after separate data showed Amsterdam had overtaken the UK capital as Europe’s largest share trading centre. That was due to EU rules that require shares traded in euros to be traded on EU exchanges or in countries with special “equivalence” status – which has not been granted to Britain.

Omar Ali, a managing partner covering financial services at EY, said: “Financial services firms across Europe have a number of chapters still to write before they can close the book on Brexit.

Experts believe there will continue to be a slow trickle of business shifting overseas, even as UK and EU negotiators reportedly near an agreement on how they plan to share information about financial market rules. That agreement is seen to be a precursor to negotiations for market access for the financial services sector.

“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.”

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