Brexit jeopardizes finance jobs in London: NPR
London is a great center for financial jobs. But after the UK leaves the EU, officials say the UK will not have access to Europe’s vast financial market. And other countries should benefit from it.
RACHEL MARTIN, HOST:
This next story is about fear and opportunity – the fear that Brexit will damage one of the biggest banking centers in the world – we’re talking about London – while providing opportunity for rival cities in Europe. As Frank Langfitt of NPR reports, in the age of Brexit, London’s loss is Europe’s gain.
FRANK LANGFITT, BYLINE: I’m here at Leadenhall Market. It’s an indoor market in London, with arched roofs and cobbled streets, in what is essentially an area that resembles Wall Street in Britain. Today, a few kilometers from here, there are 250 foreign banks and around 750,000 jobs in finance. Brexit puts some of these jobs at risk. And that’s because after the UK leaves the EU, officials say the UK will simply not have access to Europe’s vast financial market. And European countries, even small ones like Luxembourg, well, they are already taking advantage of it. I meet a guy named Nicolas Mackel here. He comes from Luxembourg where he runs the government-backed Luxembourg for Finance. Mackel ticks off some of the country’s recent gains.
NICOLAS MACKEL: Citibank announced that it was going to relocate its private banking activities. Other US operators, for example, include Northern Trust. As I also mentioned, JP Morgan has decided to move…
LANGFITT: The Bank of England says losing access to the EU market could cost the UK up to 75,000 finance jobs as London-based firms set up subsidiaries on the continent. Nicolas Mackel thinks jobs won’t disappear overnight.
MACKEL: There will be no Brexodus (ph) in the sense of masses of bankers leaving London. But it will be a slow erosion of London’s central role in Europe.
LANGFITT: Hello. Hey, John.
JOHN HEFFERNAN: Nice to meet you.
LANGFITT: Nice to meet you too.
LANGFITT: In Luxembourg, John Heffernan sees an opportunity. In October, he opened Home from Home, a grocery store here that sells food to homesick foreign bankers and their families. It is gearing up for more UK customers.
HEFFERNAN: Luxembourg sausages are different and the bacon is very fine. That just doesn’t cut the mustard, as far as the English are concerned.
LANGFITT: He shows me a fridge full of double custard, cheddar cheese and pastries.
HEFFERNAN: I guess, you know, it’s really expat comfort food. That’s how I would say it.
LANGFITT: How’s business?
HEFFERNAN: Business is up – beyond expectations. So far we are satisfied. Our biggest issue right now is logistics and tracking.
LANGFITT: Twenty-seven financial companies are already planning to open subsidiaries in Luxembourg. But Heffernan’s hopes for a Brexit windfall may be a bit optimistic. Charles Muller of KPMG, the professional services firm, says it’s unclear how much work will actually come here.
CHARLES MULLER: Even if the company comes to Luxembourg – even the funds come to Luxembourg, that does not necessarily mean that all the jobs come to Luxembourg.
LANGFITT: Many other cities are competing for jobs in London, including Dublin, Paris and Amsterdam. And some are optimistic about the potential gains.
(SOUND EXCERPT FROM THE SONG, “O COME ALL FAITHFUL”)
LANGFITT: I’m here at a Christmas market in the heart of Frankfurt, where they sell everything from waffles to Christmas decorations. And there’s a man in the corner who plays Christmas songs. And there’s a celebratory feeling in the city these days, partly because officials here feel they’re going to get thousands of jobs from the UK because of Brexit.
A few blocks away, Sebastian Schafer runs Tech Quartier, an incubator for fintech start-ups. He says Brexit has become a marketing tool for cities like Frankfurt and recently helped it attract interest from businesses around the world.
SEBASTIAN SCHAFER: Depending on Brexit, a window of opportunity opens up for other cities in Europe. So before that, it was London. And now, I think founders around the world are thinking a bit – considering, you know, different places.
LANGFITT: Eric Menges is CEO of FrankfurtRheinMain, which promotes the region globally. He doesn’t want people to think his town is trying to take advantage of it.
ERIC MENGES: We’re not poaching businesses there, poaching jobs from the UK. And we were among the first to say look. We are not celebrating Brexit.
LANGFITT: But last year’s referendum is a gift that could pay dividends for the economy as a whole.
MENGES: It could mean extra business for, you know, hotels, for restaurants, for, you know, the whole cultural scene. I think Frankfurt can really take advantage of this.
LANGFITT: To limit the damage of Brexit, the Bank of England said it would allow certain types of EU banks to continue to operate in the UK under existing rules, in the hope of retaining their activities and as many of their jobs here as possible. Frank Langfitt, NPR News, London.
[POST-BROADCAST CORRECTION: An earlier transcript referred to Luxembourg for Finance as a government bank. In fact, it is the agency for the development of the Luxembourg financial center.]
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