As a Frenchman who spent nearly three decades in equity solutions, who’s worked in London, Paris and Hong Kong, for J.P. Morgan and UBS (among others), I like to think I have a global perspective. And from my perspective, Europe is on the way down – led by London.
It’s not just the Brexit vote that’s inherently destabilizing for the City of London, it’s the chaotic response to it. The British government’s refusal to trigger Article 50 is a death warrant for London banking jobs.
For how long will the U.S. banks operating out of the UK be able to say to their shareholders that they’re just “waiting to see” what happens with the UK’s negotiations to leave the EU? Shareholders don’t like uncertainty and banks are herding creatures. All it takes is for one to declare that it’s leaving (as Jamie Dimon seemed close to doing last week), and trust me, the rest will follow.
For some banks, this may even be the end of their European dream. The need to set up an additional European office to access the mainland may prompt reflection on the cost of doing business in Europe at all. I’m thinking particularly of the Japanese houses in London here.
In the meantime, my home country is making a play for the European bankers who are now in London. J.P. Morgan may yet relocate to France – after all, it has long connections with the country, but don’t hold your breath for the rest.
If you’re a bank, France is a doomed, dysfunctional place. Sure, the French government has agreed to cut income taxes by 50% for expat bankers for eight years, but taxes aren’t the issue with Paris. The issue with Paris is stability. France is an unstable and unpredictable place – much like London has become.
In Europe, therefore, Frankfurt is the best bet. And Frankfurt is where the jobs will go. But Frankfurt is no good if you don’t speak German. This is why, if you’re a European non-German speaking senior banker like me, Asia is the place.
Asia is the future. In Europe, success belongs to the past. In Hong Kong, I can comfortable retire whilst paying zero tax on savings and investments. Life here is functional and efficient and there are plenty of nice places nearby for a holiday.
In fact, the only problem with Hong Kong is the French. In the past few years, there have been more and more of us here. It’s starting to feel like a little Paris, and believe me – that is a shame.
Philippe Moret is a pseudonym
Photo credit: Louie Wong / EyeEm