With expectations of unfavorable banking rules and regulations in post-Brexit UK, JPMorgan has warned that nearly 4,000 workers would be downsized.
Jamie Dimon, chief executive officer of the world-famous bank, said in an official statement that “heads will role” if the United Kingdom and European Union (EU) fail to agree on common banking rules.
Speaking in an interview with the BBC at the World Economic Forum in Davos, Dimon said he hopes to secure a Brexit deal that’s up to the status quo but stressed that more than a quarter of its entire workforce in the UK would be affected if expectations are not met.
JPMorgan is set to cut down an estimated 16,000 UK staff .
The giant American bank has thousands of staff working its Canary Wharf office, Glasgow, as well as in Bournemouth.
“If we can’t find reciprocal recognition of rules, and there are a lot of people who are mad with the Brits for leaving and want their pound of flesh, then it could be bad.
“…It could be more than 4,000,” Mr Davos added.
“We love London, we love working there. We’ve got, as you point out, huge efficiencies for us.
“Huge efficiencies for the eurozone too. But if they determine that you can’t have reciprocal trade practices and reciprocal regulations, it would be a lot.”
In the CEO’s explanation, JPMorgan is facing a challenge of reducing cost through staff reduction if the EU decides that Britain’s post-Brexit regulations are not “reciprocal.”
There are speculations that Britain’s financial services industry might not be able to stay in business within EU thanks to so-called regulatory equivalence, which also implies that rules in the UK’ are not less stringent or comprehensive compared to that of the EU.
The issue of employment around EU, and Britain retaining passporting rights after leaving the union, remains a quagmire for most Londoners, some of who now hope for some sort of favorable regulatory equivalence between the UK and the continent
According to The Independent, “equivalence” would effectively mean the UK transferring existing EU financial regulations onto its own statute book allowing banks and financial services companies to continue operations on both sides of the channel without breaking any rules.
However, trouble started during the interview when Dimon told BBC’s Simon Jack that JPMorgan would take drastic measure if the UK and EU can’t agree on a better arrangement.
“When asked if that outcome would represent a real threat to the future success of London as a financial center,” the BBC’s Simon Jack writes: “He gave a single word answer: ‘Yep.'”
While some companies in the financial services industry have said they will have to begin moving jobs imminently if the Government cannot give clarity on the post-Brexit situation, JPMorgan, which counts London as the center of its European hub, says it has also considered relocation.
The bank is currently making plans to expand into other financial centers, particularly Dublin, where it announced its readiness in May to buy a building with the capacity to accommodate 1,000 staff .
JPMorgan announced in November 2017 that it was gearing to employ over 60 new staff in Paris.