Jamie Dimon is at it again. Just when everyone thought the predictions of thousands of City job losses were a conspiracy concocted by all those who aren’t in affinity with Andrea Leadsom, J.P. Morgan’s CEO has spoken of difficulties ahead. If EU passporting rules are scrapped, J.P. Morgan will have to move thousands of jobs out of Britain said Dimon today. In an analysis of the options earlier this week, Deutsche’s banking analysts said passporting is almost certain to be scrapped.
Where will J.P. Morgan put those thousands of UK jobs? Dimon didn’t say, but with Paris clamouring to attract bankers with income tax breaks of up to 50% and the right to exclude foreign assets from the French wealth tax for up to eight years, France suddenly looks appealing.
It helps that France and J.P. Morgan go back a long, long way. The U.S. bank first opened a Parisian office under the auspices of Drexel Harjes, of which J. Pierpont Morgan was a partner, in 1868. – Nearly 150 years ago.
Two years later, J.P. Morgan claimed its place in the history of La République when it made a loan of £10m to Napoleon III. Napoleon used this loan to launch the Franco-Prussian war of 1870-1871. The war led to the surrender of the Alsace region to Germany, but confirmed J.P. Morgan as a friend of the French government. In return, the bank was gifted a building in Paris’s Place de la Concorde, which it swapped in 1916 for its current office in Place Vendôme.
This wasn’t the last time J.P. Morgan came to the aid of the French government. During World War I, it made a loan of $500m to France, the largest ever international loan at that time.
This might all seem like water under a very, very old bridge, but as one former banker at J.P. Morgan in Paris says the historic loans are in the DNA of J.P. Morgan’s French business. “J.P. Morgan has always had a place of privilege in France,” he argues, speaking off the record. “It’s pretty much seen as a French bank, so it will be easy for them to move people there.”
For the moment, J.P. Morgan has private bankers, asset managers and France-focused investment bankers in Paris, along with some salespeople and sales traders. European trading operations are mostly in London.
Despite Dimon’s warning, a partner at one major consulting firm said jobs are unlikely to move from the UK soon. “For the moment, all banks are just reworking the location strategies they put together after 2008,” he tells us. “We’re expecting those to be presented to boards around September and things to start moving after that.”
It’s not just about Brexit, the consultant adds: it’s about cost-efficiencies. “Credit Suisse was moving people out of London even before this happened.”