City banks are planning to move jobs and businesses away from London following the UK’s exit from the European Union. We may start seeing the impact of Brexit on the City in the coming months; banks and financial firms are considering whether to take action to secure their access to the remaining 27 EU member states by moving business out of the UK. Currently, the city of Amsterdam is in talks with major financial institutions based in London about their imminent relocation to the Dutch capital. The deputy mayor revealed that the Amsterdam mayor’s office has been in negotiations with American and Japanese banks, along with fintech and other finance firms, about moving their employees and operations from the City of London as a result of the UK’s vote to leave the EU.
Decisions in favour of relocation are expected to be made in the first or second quarter of the year, says Kajsa Ollongren who is responsible for economic affairs. The bankers’ main concern is the Netherlands’ imposition of a cap on bankers’ bonuses at 20% of their annual salary. This issue was raised by companies in the financial sector during the talks, as the Dutch cap is much lower than the EU cap. Ollongren said: “My impression, after the discussions that I have had with many companies, banks etc is that they feel that they will have to do something. For the financials, it is because of the passport issue. They will have to make sure that they will continue to work for the rest of Europe.”
It is the time of the year when companies are considering whether to put their contingency plans into action. Earlier this month, the head of Brexit at the consultancy firm PricewaterhouseCoopers (PwC) Andrew Gray, suggested that the first banks will make their announcements in February. Additionally, a report by PwC revealed that there could be 100,000 fewer jobs by 2020, as a result of financial institutions moving their businesses out of the UK.