Before the UK voted in favor of leaving the EU last July, financial institutions in the City of London had warned that in the event of Brexit, they would likely have to shift their European trading out of the City, at considerable cost to the UK economy in terms of both jobs and economic output. Many such institutions have begun preparing to get out of town, and the result of the referendum and the government’s determination to see it through have cast doubt on the future of London as a capital of world finance.
Sure enough, on Thursday Reuters reported that Barclays was expanding its offices in Dublin, Ireland, ostensibly in preparation for making it the headquarters of its European operations after Brexit is enacted:
Global banks and insurers have begun signaling how they will put plans into action to cope with a “hard” exit from the European Union, after Prime Minister Theresa May said that Britain would leave the single market. Barclays already has a small unit in Dublin with around 100 people.
“We have made clear repeatedly that we will plan for a range of Brexit contingencies, including building greater capacity into our existing operations in Dublin,” a spokesman for Barclays in London told Reuters.
Bloomberg’s Stephen Morris and Neil Callanan add that since Prime Minister Theresa May came out last week with her plan to pursue a “hard Brexit,” withdrawing Britain from the EU’s single market, international banks “have started to reveal more about their plans to shift jobs and set up offices within the EU,” particularly in Ireland:
Credit Suisse Group AG is also exploring options to expand in Dublin, people familiar with that bank’s plans said. The lender made the city its primary hub for servicing hedge funds in Europe last year, when Irish Prime Minister Enda Kenny opened the firm’s trading floor. The Swiss bank may have to get regulatory approval to upgrade its branch to a full subsidiary, whereas Barclays already has that status.
Dublin is emerging as a favored location for Credit Suisse’s so-called back-office jobs, said one of the people. The Zurich-based bank also is considering cities including Frankfurt as it develops Brexit plans for moving jobs, said the person.
Business Insider’s Lianna Brinded points to several more banks that are getting ready to move out of London, including Goldman Sachs—which is considering halving its staff there—JP Morgan, and HSBC.