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Goldman Sachs has warned that clients will foot the bill if Brexit leaves the US bank with a higher cost base.

In a podcast, the Goldman Sachs’ International chief executive Richard Gnodde said:

What’s important for the client base, and of course is important for us, and frankly the regulators and policymakers, is that our cost of production does not go up in a meaningful way.

Because if the cost of production goes up, ultimately a lot of our costs will get passed on to the client base.

He also stressed that Goldman Sachs is “pushing the authorities, both within the UK but across Europe, hard to ensure that there’s a transitional period”.

“Prime Minister May likes to call it an implementation period, but it means the same,” he added.

Last month, Mr Gnodde said his bank had already begun implementing contingency plans to deal with the potential implications of the UK losing membership to the EU’s single market after Brexit. This will include employing “hundreds” of extra people in the EU.

On Friday’s podcast, Mr Gnodde said the bank’s “base case” is to “wait and see”.

“We’re going to see what these negotiations throw up, and once we know for certain what the roadmap’s going to look like, then we’ll make our long-term plans.”

Copyright The Financial Times Limited 2017. All rights reserved.
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