City 'Will Continue To Lose Jobs To EU Following Brexit Despite May Pledge'

City 'Will Continue To Lose Jobs To EU Following Brexit Despite May Pledge'

Banking executives have said the City will continue losing jobs over the next decade as the EU builds up its own financial services industry following Brexit, despite Theresa May's pledge to defend the Square Mile.

Bosses from the likes of American banking giants Citigroup and JP Morgan - along with Russia's VTB and France's Societe Generale - bemoaned the effects of Brexit, which they said will continue to plague the UK long after its official departure from the EU in 2019.

Speaking at the St Petersburg International Economic Forum in Russia, Daniel Pinto, the chief executive of JP Morgan's corporate and investment bank, said: "I think going forward you will be in a scenario where the Europeans want to have a substantial financial services industry in their territory.

"So it's likely that the migration will continue in the years to come, probably it will take five to 10 years and you will see the full effect of the decision that the UK is taking today."

His comments came after Mrs May claimed that it "would not be sensible" to see a diminished City.

"I think they (EU countries) all benefit from the expertise, the skills, the size and the capability of the City and anything that diminished that would not be sensible for them," she said.

The Prime Minister also said she would work with the Square Mile to get a good deal for the financial services industry, if she manages to convince the electorate to vote her back into power next week.

However, Mr Pinto confirmed that JP Morgan is preparing for a scenario where there is "no deal" with the EU, where passporting rights for financial services are scrapped.

"That scenario assumes that there is no change in regulation at all, and I think that over time we will see the real effect," Mr Pinto said.

He added: "I think that at the beginning there is an interest on both sides that whatever everyone does in every sector creates the minimum amount of disruption."

James Cowles, Citigroup's chief executive for Europe, the Middle East and Africa (EMEA), said he agreed that the City's fortunes might not be fully revealed for another five to 10 years and said the bank was similarly planning for the "worst case" scenario from Brexit negotiations.

He said: "From a financial industries perspective, financial markets, it's unfortunate.

"We had a system that worked. I think passporting worked and I think as we move forward we're going to spend the next two years, spending a lot of time and resources trying to get to a position that's not as favourable as we have today."

Societe Generale chief executive Frederic Oudea added that Brexit could present an "extraordinary window of opportunity" for the EU.

"I think we have an extraordinary window of opportunity to think strategically to think about the financial services in the Eurozone, and which is needed not just for the financial services (industry) or for banks, but for growth."

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