Brexit: US Banks Transfer Huge Sums from London to Frankfurt
As the interim period before Brexit draws to a close, American banking giant Morgan Stanley plans to transfer EUR 100 billion from the UK to German financial center Frankfurt. That’s according to a report by financial website Bloomberg, which added that the transfer would take place in the first quarter of 2022.
In September, US bank JPMorgan announced a transfer of USD 230 billion (EUR 200 billion) in assets from London to Frankfurt by the end of 2020. It also told 200 of its London staff to move to Continental European locations including Frankfurt.
Other banks including Citigroup, UBS, Goldman Sachs and Standard Chartered have decided to bolster their presence in the German financial capital. Under EU rules, banks based in London have had to set up hubs in the bloc because free access to the single market ends on Dec. 31, with future direct access limited or temporary at best, reported Reuters news agency.
Non-German lenders moved some EUR 400 billion euros of assets to the country by the end of 2020, more than doubling their combined balance sheet there, Germany’s national Bundesbank said.
“This is hardly a surprise in light of recent warnings by British authorities about potential problems in equivalency between the British and EU financial regulatory environments,” Germany Trade and Invest UK Desk Manager Richard Todd of the JP Morgan transfer. “The message is clear: If financial institutions want to fully exploit the business potential of the EU, they need a strong foothold within the bloc.”