As the U.K’s transition period in line with their exit from the European Union nears its conclusion, many financial institutions continue to shift their operations from the country as a way to maintain their interests in Europe. Morgan Stanley becomes one of the latest big names to make such a move.
The giant U.S lender plans to move $120 Billion worth of assets to Germany into their Frankfurt-based subsidiary Morgan Stanley Europe SE.
The move by Morgan Stanley is a clear sign of the panic that has struck international companies operating in the UK. The companies are doing so in preparation for the expected decline of UK’s grip on the region’s financial industry as a result of Brexit.
Germany is positioning itself as the next financial hub in the territory with Major Non-German financiers intending to move €400 billion of assets to the country by the end of the year. Some of these banks include Standard Chartered Plc, Citigroup Inc., and UBS Group AG. JPMorgan Chase & Co., another financial giant, is shifting $200 Billion in assets and a staff of 200. And this is just the first wave, according to Dorothee Blessing, the Managing Director, Regional Head for J.P. Morgan in Germany.
Morgan Stanley’s subsidiary in Frankfurt had €14 billion worth of assets by end of 2019. The office that is located in Omniturm, Frankfurt’s high-rise area, has a leased office space that can accommodate about 600 staff members. The bank, that has more than 5,000 employees in London alone, has already began shifting its workers from the London office to various locations in Milan and Madrid. They intend to greatly expand their books in Germany.
Morgan Stanley opened a trading avenue in Paris in 2018, and is soon to be joined by Goldman, which planning to open a stock platform in the city.
Ernest & Young consultancy firm published in an October report that this massive shift of assets is only the beginning, and it expects further move of both workforces and property once the U.K.’s transition period officially comes to an end.