In the immediate aftermath of the news that England will leave the European Union, the sense of change was felt on Wall Street and the US trading community.
London will lose banking jobs due to Brexit:
Last week, Morgan Stanley said it would relocate as many as 1,000 workers if the U.K. was to leave the EU. J.P. Morgan Chase, prior to the vote, said it was likely to move 4,000 employees out of Europe. But on Friday morning after the vote, Dimon said JPMorgan was committed to keep a large staff in London. Still he said J.P. Morgan is likely to move at least 1,000 people out of London.
JPMorgan CEO Jamie Dimon told staffers that JPM may shift London employees:
J.P. Morgan has 16,000 employees in the U.K. We are extremely proud of the work they do and our long history in the country. Regardless of today’s outcome, we will maintain a large presence in London, Bournemouth and Scotland, serving local clients as we have for more than 150 years.
We recognize the potential for market volatility over the next few weeks and we are ready to help our clients work through it. As of today, there are no changes to the structure of our clients’ relationships with JPMorgan Chase or their ability to work with our firm, but again this may change in the coming months or years.
Morgan Stanley says London may no longer the capital of Europe for capital markets:
Colm Kelleher, president of Morgan Stanley, said a leave vote would see London as a financial centre cede ground to other cities, such as Frankfurt and Paris and therefore force the bank to potentially relocate its European headquarters, with Frankfurt and Dublin cited as as options.
Meanwhile, Goldman Sachs analysts are reassuring clients:
“The largest impact of Brexit on European equities would likely be via a higher equity risk premium (ERP) in our view. Historically, we find all indices in Europe are negatively correlated to UK policy uncertainty and risk. From current levels we would expect a further 15% or so downside [to the Stoxx].”
Goldman Sachs CEO Lloyd Blankfein rallied his staffers thusly:
As you may have seen by now, the British people have voted to leave the European Union, and we respect this outcome. We have had a strong team focused on this potential result for many months. There is no immediate change to the way we conduct our business. A process of negotiating the terms of the exit will now begin, and is expected to take a considerable period of time. Goldman Sachs has a long history of adapting to change, and we will work with the relevant authorities as the terms of the exit become clear. We are committed to our people and our clients, and will work diligently to ensure the best possible outcome. We will continue to communicate with you as relevant information becomes available.
Traders will update this story as news breaks.
