A shopping list of Brexit’s damage to the City of London

London’s Canary Wharf
financial district
REUTERS/Toby
Melville

• Banks and financial firms that make up 6.5% of UK GDP have
  already taken precautionary measures to prep for Brexit, meaning
  a lot of damage is already done.
• Banking is just the tip of the iceberg with many other
  industries also making irrevocable decisions

The damage to the economy from Brexit is already afoot — so much
so that the act of leaving the EU itself is, at this point,
increasingly irrelevant.

Leaders of companies with UK operations haven’t been taking any
chances. The mere whiff of uncertainty surrounding a soft, hard,
no-deal or any other Brexit has been enough to send them packing.
These moves won’t be undone, even if Brexit were somehow
cancelled.

The impact on the City of London could be especially damaging —
financial services, heavily concentrated in the capital, account
for 6.5% of the UK’s GDP.

“I don’t believe Brexit can be a trigger for a financial
crisis or a banking crisis,” Sergio Ermotti, CEO of Swiss
investment firm UBS,
told Bloomberg back in September. “But it could undermine
investments, and trigger maybe a slowdown in the economy. That’s
clear.”  

Here’s a roundup of the financial exodus so
far: 

• US bank giants Goldman
  Sachs, JPMorgan, Morgan Stanley, and Citigroup have
  moved 250 billion euros ($283 billion) of
  balance-sheet assets to Frankfurt because of
  Brexit. 
• Bank of America is
  spending $400 million to move staff and operations in
  anticipation of Brexit, and is trying
  to persuade London staff to move to Paris. 
• 
  Barclays is seeking to transfer €250 billion
  ($280.8 billion) of business to Dublin and is set to
  become Ireland’s biggest bank. 
• France’s BNP Paribas, Credit Agricole, and Societe
  Generale have opted to transfer
  500 staff out of London to Paris. 
• UBS has chosen
  German financial center Frankfurt for its new
  EU headquarters. 
• Swiss
  peer 
  Credit
  Suisse is moving 250 jobs to Germany, Madrid, and
  Luxembourg among other EU 27 countries as well as $200 million
  from its market division to Germany. 
• Germany’s Deutsche
  Bank is also considering shifting large volumes of
  assets to Frankfurt as part of its
  Brexit plan.
• 
  HSBC,
  Europe’s biggest bank, 
  has shifted ownership
  of many of its European subsidiaries from its London-based
  entity to its
  French unit.
  
• Australia’s largest bank by
  assets, Commonwealth Bank of Australia, has
  set in motion plans to base around 50 staff in
  Amsterdam, and has applied for a banking licence in the
  country.
• Other Australian lenders
  Macquarie, Westpac, and ANZ are also in talks
  to move operations to Dublin and continental
  Europe. 
• Europe’s biggest repo trading venue, called
  BrokerTec, is being moved to Amsterdam from London, meaning a
  $240 billion a day repo business is leaving the
  UK. 
• More than
  100 UK-based asset managers and funds have applied to
  the Irish central bank for authorization in Ireland.

The impact of these changes will
see less tax revenue for the government,
fewer jobs, and a dent in dealmaking, taking a shine off the
City’s lustre.

And that’s just financial
services.

Schaeffler, a car parts company,
is closing two UK factories because of
Brexit, leading to 
570 fewer
jobs. 
Among others:
T
here’s a “Brexit-busting” ferry that
sidesteps UK trade routes, drug companies are stockpiling
medicine, and investors in the once-vibrant UK tech scene are
drying up. (A great Twitter thread by a self-described 48%-er in
Cambridge lists a wide array of industry impact. You can read it
here.)