Goldman Sachs Brexit relocation plan: From UK to Frankfurt

In October this year, the Russian state-owned VTB already announced to moves its HQ away from the UK. Now, Goldman Sachs follows suit. Is Goldman Sachs Brexit relocation plan already confirmed? Will other major players in the market follow? 

10 November, AtoZForex  Consequences of Brexit are not just felt by the UK-based lenders but also other banks and companies that operate in the country. Goldman Sachs is one of the  main commercial hubs on the European continent which is considering to move out of the UK to Frankfurt.

Details of Goldman Sachs Brexit relocation plan

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Goldman Sachs considers moving to Frankfurt as a way to authorise the European Union’s Central Bank supervision. The U.S investment bank aims to put some of its operations under the euro zone’s main banking supervisor’s watch.

A person that has knowledge of the matter said that coming under ECB’s jurisdiction will allow them to maintain their selling activities for clients across the wider EU post-Brexit and the euro zone. It’s not confirmed yet if Goldman Sachs will implement its relocation plan. However, sources close to the case have said that Goldman Sachs had talks with ECB officials in Frankfurt related to the case. A Goldman Sachs spokesman said that they have many uncertainties about the result of Brexit negotiation. He added;

"We continue to work through all possible implications of the Brexit vote, we have not taken any decisions as to what our eventual response will be.”

What would result from Goldman Sach’s move?

Goldman Sachs considering this move would shift their European presence to the centre of the euro zone. On the one hand, the relocation of Goldman Sachs would represent a blow to London’s state as a global financial centre. On the other hand, it would be an achievement to Frankfurt as it would be a small city which is Germany’s own finance capital.

Goldman Sachs has services including foreign exchange trading and corporate finance, broking and market-making in securities. They now rely on EU’s “passporting’’ system, which allows them to sell across the area without setting up a branch in each member state. Yet, the banks’ UK operations are expecting their passporting rights to be lost immediately after Brexit.

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