The European Central Bank is pushing lenders to add hundreds of extra employees and billions of additional capital to their operations in continental Europe after Brexit failed to spark a big shift, the Financial Times reported.
Relatively few banking jobs have left the City of London since Brexit, confounding predictions that tens of thousands would relocate. But the ECB is upping its demands that lenders shift more resources away from London, executives, lawyers and supervisors told the FT.
The pressure affects banks from across the world that have used London as their hub to serve clients in the EU. The push is partly linked to the end of a reprieve granted during the pandemic. The ECB is also taking a sterner line than expected on location of risk managers overseeing EU trades and how much capital EU operations should have.
An executive said his bank would have to more hundreds more people than expected because of a tough ECB line on managing risk of EU trades from the UK.
“We’re ramping up our European model enormously,” the executive told the FT. The demands risk aggravating tensions between the ECB and the Bank of England which is concerned banks are under pressure to relocate to poach business from London rather than to support financial stability.
