City giants begin move to Frankfurt as Brexit doubts grow
German finance hub looks to assume the mantle of Europe’s business capital
Some of Wall Street’s biggest firms are moving their European headquarters from London to Frankfurt, after months of slow and acrimonious negotiations between Britain and the EU.
With London’s future as Europe’s financial capital more uncertain than ever, Reuters reports Goldman Sachs has agreed to lease 10,000 square meters of office space in the German finance hub, which would be enough room for as many as 1,000 staff.
That would increase its number of employees in Germany fivefold, allowing it to bolster activities including trading, investment banking and asset management.
A Goldman Sachs spokesman said increased staff in Frankfurt would give the bank “space to execute on our Brexit contingency plan”. It is a big win for the German city, as it looks to benefit from Brexit uncertainty and take the City of London’s financial crown.
The report comes after Morgan Stanley signed a lease for more office space. JP Morgan is “considering” dramatically expanding its Frankfurt operation and Citi has also confirmed it will expand its Frankfurt office.
These moves, which have already had a dramatic effect on house prices in Frankfurt, are prompted by nervousness over the state of the Brexit negotiations and fears that London will find it harder to do business in Europe once the UK leaves the bloc.
Although some politicians in Britain are sceptical banks will follow through by moving large numbers of jobs, “bankers in the City of London financial hub see an urgent need to act”, says Reuters.
Earlier this week, Bank of England deputy governor Sam Woods said any transitional deal with the EU to smooth the way for business would probably need to be agreed by Christmas to prevent banks implementing their emergency Brexit contingency plans.