The chief executive of Canary Wharf-based bank JP Morgan Jamie Dimon has warned that job losses would take place “over a period of years” as the US operation prepares for Brexit.
The financial giant, which has its European HQ at 25 Bank Street, said that 4,000 jobs were at risk if Britain lost its “passporting” rights – which allowed UK operations to sell freely across the European Economic Area.
Mr Dimon told Financial News : “We’ve been planning for a range of outcomes because it’s still as uncertain as a couple months ago.
“What we know now is that this will be a slow process, and all the staff moves would not happen at once but over a period of years.
“If there is not a clear transitional period decided early in the process, where passporting rules still apply for a few years after negotiations, then we’d likely have to accelerate our timetable in complying with new rules.
"I wish we could keep it all here in London. I think it's very good for Europe."
Increasingly banks have accepted that the financial sector will not get a special deal, despite the importance of Canary Wharf and the City to the UK economy.
Instead, they are lobbying for transitional arrangements that would avoid a “cliff edge” – a standpoint that has received a more sympathetic reception at Numbers 10 and 11 Downing Street.
Prime Minister Theresa May accepts there may be a need for time to make “practical” adjustments.
Mark Boleat, of the City of London Corporation , said: “Brexit has brought with it a significant amount of uncertainty for businesses in the services sector.
“Important strategic business decisions are being delayed and much needed investment postponed or withdrawn altogether. Firms’ nervousness can only be allayed if they know how they can continue running their business. A transitional arrangement should be agreed as soon as possible.”
Most banks now accept there will be a need to move some operations into the EU with HSBC and Goldman Sachs saying the change could cost thousands of City jobs. A report by PwC said there could be 100,000 fewer jobs by 2020.
The current argument within the sector. Many argue London is a financial powerhouse with tremendous “stickiness” which the big banks would be reluctant to leave. Others say that the drain to rival centres like Paris and Frankfurt is inevitable as banks follow the money, fatally undermined the City’s global standing.
Mr Dimon said: “JP Morgan will be able to adapt to whatever the UK and the EU decide. But there was a good reason for the European Union, for peace and for the economic prosperity from the common market. Those are still two good reasons.
“I understand the frustration that it got bogged down with bureaucracy, and folks here in the UK would talk about it being anti-democratic, with people making decisions in Brussels who weren’t elected that affected Britain.
"And the common market isn’t everything, I completely understand that. Hopefully, rational heads will make it in a way that’s good for everybody.”
“A major fear to me about Brexit is that it causes the EU to fail down the road."