Brexit will ‘stall’ City, says Goldman Sachs boss

Goldman Sachs (NYSE:GS) chief Lloyd Blankfein has warned that London’s financial centre will ‘stall’ as a result of Brexit uncertainty.

“It will stall, it might backtrack a bit, it just depends on a lot of things about which we are uncertain, and I know there isn’t certainty at the moment,” Blankfein said in an interview with the BBC. “I don’t think it will totally reverse.”

In addition, Blankfein highlighted the necessity for an adjustment period of “a couple years” for banks after the Brexit deal had been finalised in 2019.

“We are talking about the long-term stability of huge economies with hundreds of millions of people and livelihoods at stake, and huge gross domestic product,” he added. “So, if it takes a little while, I’d rather get it right than do things quickly.”

Blankfein did acknowledge that the bank had ‘contingency plans’ to move its staff out of the UK, should the process be rushed. Despite this, Blankfein went on to say:

“We don’t have big plans now, we are looking, we are trying to avoid,”.

Speaking on the benefits of operating in London and within the U.K, the banker commented:

“Obviously, a lot of people elect to have their European business concentrated in a single place, and the easiest place, certainly, for the biggest economy in the world [the US] to concentrate would be the UK – the culture, the language, the special relationship – and we are an example of that.”

Back in March, the Wall Street bank announced that it had preliminary plans to relocate hundreds of staff from London. According to reports, the bank has made plans to take extra office space in both European cities of Paris and Frankfurt. Nevertheless, it has yet to be revealed how many staff are set to be affected by the relocation plans.

This follows similar confirmation earlier in the week from US rival bank JP Morgan (NYSE:JPM) that it will move hundreds of staff from London to Dublin, Frankfurt and Luxembourg as a result of Brexit.

Goldman Sachs, the world’s second largest investment bank, currently employs over 6,000 individuals in London.

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