Goldman Sachs has stepped back from identifying a single European city as its post-Brexit EU home and has instead chosen to split its business between Frankfurt and Paris.
Lloyd Blankfein, Goldman’s chief executive, said the German and French cities would be the main centres from which the US investment bank would handle business that can no longer be conducted in London after March 2019.
Blankfein, who has posted a number of pointed tweets about Brexit, also indicated that staff could choose where to be based and that Americans working for the bank may plump for Paris rather than Frankfurt.
In an interview with French newspaper Le Figaro, Blankfein said Brexit was forcing the bank to decentralise activities that once took place in London. “But we won’t have a single hub, but two – Frankfurt and Paris because they are the two biggest European economies ... In the end, it’s the people who will largely decide where they prefer to live,” he said.
“We will have more employees on the continent. Some, if they want to, would come from London; we will hire others,” he added. “And I can imagine that many Americans would prefer living in Paris than Frankfurt for various reasons.”
His remarks come at a time when regulators are warning that banks, insurers and fund managers will need to implement their Brexit contingency plans soon unless there is a transition deal.
“We are getting closer to a critical moment when decisions will have to be made,” Blankfein said.
Goldman employs 6,000 people in the UK capital and is in the process of building a new £350m European headquarters just off Fleet Street. However, it has yet to disclose how many will be housed in the new location when it opens in March 2019, just after the UK is due to leave the EU. The bank has also leased eight floors in a new Frankfurt tower block that could host up to 1,000 staff.
Last week, Blankfein told his 70,000 Twitter followers that he was struck by the “positive energy” in Paris, adding: “And the food’s good too!” Paris is hoping to take 10,000 jobs from London’s financial services industry.
A month earlier, he had tweeted as he left Frankfurt: “Great meetings, great weather, really enjoyed it. Good, because I’ll be spending a lot more time there.” International schools in Frankfurt are building extra classrooms in preparation for bankers’ children arriving.
Through Twitter, he has also called for a second referendum in the UK and warned that jobs were under threat in London, posting an aerial shot of the new London building with the words “Expecting/hoping to fill it up, but so much outside our control”.
He said France was at a critical moment, with the president, Emmanuel Macron, seeking to push through reforms to the economy.
The decision by Goldman to focus on two EU centres after Brexit reflects the views of some financiers that business that can no longer take place in London will fragment. Frankfurt and Paris are not the only cities hoping to benefit: Dublin, Luxembourg, Milan and Amsterdam have also been vying for business.
Bank of America, for instance, has picked Dublin for its post-Brexit hub, but also made clear that it could move roles to other parts of the EU. Another US bank, JPMorgan Chase, has bought a new office in Dublin’s docklands area that can house up to 1,000 staff.
However, the Swiss bank UBS has indicated that its initial warning that it might have to move a fifth of its 5,000 London-based staff was too severe.
Blankfein also told Le Figaro that time was running out to make Brexit plans. “Everyone needs a script, and fast,” he said.
His comments chime with officials at the European Central Bank, which on Monday warned banks they needed to make progress with Brexit planning. “My message to all affected banks is this: don’t procrastinate. No one will wait for you. When Brexit happens you will either be prepared, or not. I advise you to be prepared,” said ECB official Sabine Lautenschläger in a speech in Frankfurt.
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