As we observed after the British election two weeks ago, one of the big risks of all the political turmoil in the UK is the likelihood that - Brexit or not - U.S. banks decide that Britain doesn't represent a stable base in Europe any more. After all, Morgan Stanley has around $494m of assets in its European business; Goldman Sachs has around $850bn. That's a lot to have sunk in a country where political stability seems to be a thing of the past.
In his comments to German media at the weekend, Richard Gnodde, president of Goldman Sachs International, seems to have subtly made precisely that point.
Gnodde didn't explicitly criticize British instability. Instead, he strongly praised German political stability.
Speaking of German chancellor Angela Merkel, Gnodde said, "The German chancellor has proved she is a very trustworthy, very stable, very strong leader. - And she's done this for many years, through several crisis."
Gnodde didn't mention British prime minister Theresa May, but the contrast could not be more stark. While Merkel has been in power in Germany since 2005 and looks very likely to be reelected in September, Theresa May has been in power since July 2016 and is trying to form an unstable coalition with the Democratic Unionist Party after failing to win a majority earlier this month. Brexit aside, this looks like a good reason to move 200+ jobs to Frankfurt and ultimately shift billions of dollars in assets out of the UK.