American bank JPMorgan is transferring billions in assets to German banking capital Frankfurt in reaction to the United Kingdom’s departure from the Europe at the end of 2020. That would make it the sixth largest bank in Germany.
JPMorgan didn’t offer any initial comment. Financial newspaper Bloomberg reported that the USD 230 billion (EUR 200 billion) migration of assets would take place by the end of 2020 and that JPMorgan has told 200 of its London staff to move to Continental European locations including Frankfurt.
The move is part of a trend of banks, including Citigroup, UBS and Standard Chartered, that 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.
“There have been a lot of financial service companies making moves like this although this is one of the biggest so far,” said Germany Trade and Invest UK Desk Manager Richard Todd. “The news from JPMorgan 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. This message is clear: If financial institutions want to fully exploit the business potential of the EU, they need a strong foothold within the bloc.”