JP Morgan is considering leaving the UK and relocating in continental Europe as a result of Brexit.
In a letter to shareholders, Jamie Dimon, the chairman and chief executive of JPMorgan Chase warned that although the UK had now left the EU, there were many issues still to be negotiated and resolved, particularly regarding the financial services industry. His stated that the EU will continue to have the “the upper hand” in these ongoing negotiations.
He said unless London is able to “adapts and reinvent itself” post-Brexit, this could mean JP Morgan shifts its EU-focused business functions to the continent, although he stressed any such move would be many years away.
He said: “In the short run this [Brexit] cannot possibly be a positive for the UK’s GDP – the effect after that will be completely based upon whether the UK has a comprehensive and well-executed strategic plan that is acceptable to Europe.”
Dimon added that “few winners were likely to emerge” from Brexit and the UK’s decision to leave the EU will make financial services fragment, with centres such as Amsterdam, Frankfurt, Paris and Dublin, likely to grow in importance at London’s expense.
The UK and EU have agreed to begin talks on a deal for financial services. Dimon added: “We may reach a tipping point many years out when it may make sense to move all functions that service Europe out of the United Kingdom and into continental Europe.”
He added that London needs to reinvent itself to keep these financial services businesses and associated functions. “Innovation is key to preparing for doing the business of tomorrow versus relying on the shifting ways of the past.”
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