A Brexit-induced rush of banking jobs in Milan? Not exactly

In theory, banking jobs in Italy are going up in the world ahead of Brexit. After all, Goldman Sachs has said it wants to increase its Milanese headcount from 20 to 100 people in a new office near Duomo Cathedral. "Senior bankers" are reportedly being moved out of London to staff it. If you talk to people on the ground though, it's all strangely quiet.

Two Italian Goldman MDs, speaking on condition of anonymity, said last year's statement has so far been more words than actions. They claim that only four senior bankers, including Francesco Pascuzzi, have moved to Milan to date, and that they did so for personal rather than Brexit reasons. They suggest too that those 80 extra staff may yet be more contingency planning in case of a hard Brexit than a firm commitment to the Italian city. A Goldman spokeperson said: "These moves reflect our ongoing investment in our Italian franchise. This investment is made independently of our Brexit contingency plans."

Nonetheless, the lawyers who would be at the forefront of any wholesale banking job moves from London to Milan say things are quiet. Maurizio Delfino, the founding partner of Studio Legale Delfino e Associati Willkie Farr & Gallagher LLP, says he's seen no major financial firms making provisions for moving to Milan.  Tobia Croff, a partner at Shearman & Sterling's Milan practice, said a clear alternative hub to London has yet to emerge.

Brexit isn't just about big banks though. Giuseppe Pezzulli, the chairman of Select Milano, an Italian lobbying group that promotes the multilocation of London’s Euroclearing market across London and Milan, says the City of London comprises far more than major financial services firms. After Brexit,  Pezzulli says businesses like Chinese finance, Islamic finance, shadow banking, and energy trading will likely remain in London, attracting petroleum-related IPOs in the process. By comparison,  Pezzulli says it makes sense for Milan to chase Euroclearing and to develop a regional rule as a pan-European market for small and mid-caps through Euronext.

This might be why there's little sign of jobs moving to Italy yet. The ultimate shape of the Italian market remains unclear. Goldman's Italian MDs say it's as likely that Dublin will evolve into a smaller European hub as that Milan will. Italian partners at Cinven and the Carlyle Group said  a "multi-hub" model remains the most likely outcome: jobs will disperse across Europe rather than to one city.

Milan does, however, have an advantage when it comes to attracting senior staff from abroad. The Italian government has introduced a new tax regime for high net worth individuals. Under this, managing directors can move to Italy and pay a flat rate of €100k a year instead of income tax on their overseas earnings. The flat rate can be paid for 15 years. Tax rather than Brexit may induce senior moves to Milan, at least in the short term.

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