LONDON — Deutsche Bank’s chief regulatory officer has warned that
the bank may be forced to move up to 4,000 staff from the UK to
Europe as a result of Brexit.
Sylvie Matherat, who joined the German lender in 2015 from the
French central bank, said that client demands and pressure from
regulators could combine to force almost half of Deutsche’s 9,000
UK staff to relocate to Europe.
“For front office people, if you want to deal with an EU client,
you need to be based in the EU. Does it mean I have to move all
the front office people to Germany or not? We’re speaking of
Matherat said in comments reported by Bloomberg News.
“Then you have the local supervisors who rightly say, come on, if
you have your client here, if you book your operation here, you
need to have your risk management capacity here. It means another
With an election win for the Conservatives looming, the City of
London’s position as Europe’s financial centre is under threat
from a “hard Brexit” that will likely strip the UK of its
Theresa May’s government is seeking to end freedom of movement
for EU citizens and pull the UK out of the single market. The
passport is part of the single market and is a system of common
financial rules that allow UK based financial firms to access
customers and carry out activities across Europe. The Financial
Conduct Authority (FCA) said last year that
5,500 UK companies rely on passporting rights, with a combined
revenue of £9 billion.
As a result of the threat to passporting,
most major financial firms are looking at establishing or
extending European offices to cope with the looming rule
changes. Executives from HSBC, UBS, JPMorgan, and Goldman
Sachs have all publically suggested that jobs will be moved away
from Britain as a result of Brexit.
The Times reported on Thursday that seven banks have signed
deals to open offices in Frankfurt, with a further 20 in talks to
relocate staff to the German city.
Lenders will have to physically move a large number of staff
because of the Single Supervisory Mechanism, the main banking
supervisor for the eurozone. It won’t allow “empty shell
companies” to skirt around potential post-Brexit trading
restrictions on UK-based firms.
Last month, Sabine Lautenschlager, vice-chair of the
Frankfurt-based SSM, a unit of the European Central Bank,
said applications for European licences will be scrutinised
“It is the ECB that grants licences in the euro area. And to be
clear: we will only grant licences to well-capitalised and
well-managed banks,” she said.
“We will not accept empty shell companies. Any new entity must
have adequate local risk management, sufficient local staff and