The final exit of United Kingdom from the European Union or Brexit, to be concluded by December, has prompted an increasing number of multinational banks using the U.K to access the European Union (EU) to dash for the exits.
The latest is US-based JP Morgan Chase & Co which said it is shifting assets estimated to be worth US$ 230 billion from the UK to Frankfurt, considered the financial centre of the EU.
While the U.K. withdrew from the EU’s political institutions on January 31st, 2020, it is still in the tariff-free region until the end of 2020 as negotiators work out a new deal.
London-based Barclays has meanwhile shifted its EU nerve centre and huge assets to Dublin in Ireland.
US banks are plotting a future that will require them to deal with European clients while operating out of London.
While the type of assets being moved by JP Morgan has not been specified, Reuters has reported these include cash as well as stocks and bonds.
The EU’s banking watchdog said in July that banks using the UK as a link to EU must relocate before the transition period ends in December.
JPMorgan plans to complete the migration of assets to its Frankfurt-based subsidiary by the end of the year, according to Bloomberg News.
Barclays has spent between US$129-$258 million in moving operations and staff out of UK as it prepares for Brexit, its UK chairman Gerry Grimstone said.
International banks have been setting camp across the EU since Britain voted to leave the bloc four years ago. This is to ensure they can continue to serve clients if their operations in London lose the rights to do so.
Bank of America has reportedly spent US$400 million on its Brexit preparations. It is still unclear how much Morgan Stanley has spent on its relocations to Paris and Frankfurt.
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