The UK’s vote to leave the European Union has made the chance of a eurozone collapse five times more likely, JP Morgan CEO Jamie Dimon said.
Brexit made the “chances of the eurozone not surviving in the next decade five times higher,” Dimon said according to a report in the Financial Times.
Dimon made the comments at a conference organised by the International Institute of Finance, which was attended by other Wall Street bank CEOs including Morgan Stanley boss James Gorman.
Dimon also said that Brexit would create uncertainty for the UK but not disaster.
“It will reduce the GDP of the UK. That’s not a disaster. It will create years of uncertainty. That’s not a disaster,” he said.
Morgan Stanley CEO James Gorman said the bank was looking at whether it needs a to move employees to different financial centres.
Britain risks losing its financial passport rights to offer and sell services in the European Union without restrictions. Many US investment banks use their base in London to passport into the single market of 28 EU member states.
“Do you have the infrastructure you need in any of these places?” Gorman said, according to the FT. “I think the big winner is going to be New York. I think that will be one of the big consequences here.”
It will reduce the GDP of the UK. That’s not a disaster.
Goldman Sachs is preparing plans to move around 2,000 British jobs overseas if the UK loses its financial passporting rights after Brexit, the Sunday Times reported.
The newspaper cites an unnamed City sources as saying that the investment bank is looking at moving a third of its 6,000 strong UK workforce to mainland Europe in the event of a “Hard Brexit.”
“Hard Brexit” is the term used to describe the UK cutting off all relations with Europe and prioritising control over immigration, as opposed to maintaining some economic links in return for concessions on freedom of movement.
The loss of passporting rights would be devastating to the City of London. The Financial Conduct Authority (FCA) said earlier this year that 5,500 UK companies rely on passporting rights, with a combined turnover of £9 billion.