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City ‘will stall’ over Brexit risk

The chief executive of the world’s second largest investment bank has warned that London “will stall” because of the risks from the Brexit process.

Lloyd Blankfein said that his firm, Goldman Sachs, which employs 6,500 people in the UK, had “contingency plans” to move people depending on the outcome of the negotiations.

Mr Blankfein said he hoped the bank would not have to trigger the plans.

He wants to keep as much of its activities in the UK as possible.

In an interview with the BBC, Mr Blankfein revealed the firm had held discussions with different cities across Europe and had looked at increasing office space in a number of locations, thought to include Frankfurt, the financial capital of Germany, and Dublin.

Mr Blankfein said both sides in the Brexit negotiations were playing for very high economic stakes and that there would need to be an implementation period of at least “a couple of years” once the exit deal had been agreed by the spring of 2019.

If there was not, banks like Goldman would have to act “prematurely” and possibly move jobs and activities.

“We are talking about the long-term stability of huge economies with hundreds of millions of people and livelihoods at stake and huge gross domestic product,” he told me.

“So, if it takes a little while – I’d rather get it right than do things quickly.”

I asked him if the expansion of London as a financial capital over the last three decades would go into reverse because of the Brexit process.

“I don’t think it will totally reverse,” he told me.

“It will stall, it might backtrack a bit, it just depends on a lot of things about which we are uncertain and I know there isn’t certainty at the moment.”

 

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