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A group of large financial institutions with big London operations, led by Wall Street’s pre-eminent banks, have told the US commerce secretary that Britain’s unstable government and slow progress in Brexit planning may force them to start moving thousands of jobs out of the City in the near future.

The warnings came on Friday during a closed-door meeting between executives from the banks, which included JPMorgan Chase, Goldman Sachs and HSBC, and Wilbur Ross, the US commerce secretary, during his visit to London, according to people briefed on the discussions.

Those briefed on the talks, which were held over lunch at Wiltons restaurant in St James’s, said the banks were particularly concerned by the failure of Britain to provide clarity over whether it will secure a transition deal to smooth the changing regulatory regime after it leaves the EU. They warned they had even less clarity over what a final Brexit deal will look like.

Without clarity from the government about its plans once the UK has left the EU, the executives said jobs would move back to the US or to other European capitals as banks begin to carry out their worst-case contingency plans, the sources said.

“There was broad discussion around the lack of progress in the Brexit talks and some discussion around various political scenarios,” one person briefed on the talks said.

Morgan Stanley had been invited to the hastily assembled Ross session but was unable to send a representative. The banks declined to comment.

US banks have been among the loudest critics of Britain’s decision to leave the EU since last year’s referendum. Lloyd Blankfein, the Goldman Sachs chief executive, recently tweeted that he anticipated “spending a lot more time” in Frankfurt once the UK has left the EU.

But the warnings in private meetings with Mr Ross as well as similar soundings taken by the City of London Corporation, the capital’s local government, on a fact-finding mission to Wall Street and Washington, showed a level of urgency not seen in previous criticisms, those present said.

The banks warned Mr Ross that a “point of no return” is fast approaching, when they must start moving jobs, capital and infrastructure to meet the March 2019 deadline for the UK leaving the EU if no transitional deal is secured.

“The fear of a crash-out is rising,” said Catherine McGuinness, chairman of the policy and resources committee of the City of London Corporation, who headed the group’s US delegation. “We need action, not warm words. We really need progress.”

Despite the heated criticism of Theresa May’s Conservative government, the prospect of a Labour government under Jeremy Corbyn, whose party has pushed for a transaction tax and tougher regulation, was a worse proposition for the US banks, those briefed on the talks with Mr Ross said.

Ms McGuinness said the next three months would prove critical in determining whether foreign banks, which have contingency plans to move up to 10,000 jobs in the short term, would press ahead.

“We think it’s around the 10,000 mark. That’s not the end of the story,” said Ms McGuinness, whose mission included stops at Wall Street banks, lobbying groups and Washington regulators. “We really shouldn’t understate or underestimate what a critical moment we’re at for this sector.”

Asked about the fragility of the British government, amid divergent cabinet views on leaving the EU and allegations of sexual misconduct by MPs and ministers, Ms McGuinness said: “This is a moment for strong leadership. But it’s quite difficult for a divided cabinet to give that.”


The UK’s main banking supervisor at the Bank of England confirmed last week that the central bank was working on the assumption 10,000 jobs would be lost if the UK crashed out of the EU with no deal in place. However, Sam Woods, deputy governor, said that a longer-term 75,000 job-loss figure cited in a previous report by Oliver Wyman, the consultancy, was “plausible”.

Mr Woods also said a transitional deal was an asset whose value would diminish through time, as banks scrambled to get in place for March 2019.

Additional reporting by Martin Arnold in London and Laura Noonan in Zurich

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