Goldman Sachs

Goldman to shift to Europe if Britain quits EU

Huge job losses in financial sector expected as pullout from union may force firms to relocate

PUBLISHED : Friday, 06 December, 2013, 5:09am
UPDATED : Friday, 06 December, 2013, 5:09am

Goldman Sachs has said it would move much of its European business out of London if Britain leaves the European Union.

The warning from the world's most powerful investment bank comes as political pressure for Britain to leave the EU mounts.

Prime Minister David Cameron has committed to holding a referendum on Britain's membership if the Conservatives win the next election and some Conservative lawmakers have been agitating for an early vote on the matter.

Michael Sherwood, a co-chief executive of Goldman Sachs International, said: "In all likelihood we would transfer a substantial part of our European business from London to a euro-zone location - the most obvious contenders being Paris and Frankfurt."

International banks such as Goldman and Morgan Stanley employ thousands in Britain working on projects and trading assets across Europe. Goldman employs 6,000 of its 7,000 European staff in Britain.

A Liberal Democrat member of the European parliament, Sharon Bowles, said Sherwood's comments to Germany's Frankfurter Allgemeine Zeitung showed there would be big job losses in Britain's financial sector if the country left the EU.

"Leaving would mean losing unfettered access to the single market and influence over its rules," Bowles said. "That would inevitably make a lot of banks reconsider whether to locate their business here, dealing a major blow to the UK economy just as it begins to show signs of recovery.

"We cannot simply stand by and let the euro sceptics throw our economic recovery away. That's why it is so important that businesses are making their voices heard and contributing to the debate."

Goldman has argued in the past that Britain needs to stay in the EU for London to maintain its position as the continent's financial centre. It has said that any shift would be gradual but that inevitably operations would move to other countries that would build up the support industries required.

The City of London Corp, which governs the City - London's financial district - has said leaving the EU is a constant worry for financial institutions based in London. A recent Confederation of British Industry poll found that nearly 80 per cent of businesses supported membership.