Brexit: Goldman Sachs boss warns uncertainty will ‘stall’ City

Goldman Sachs’ chief executive has warned that the City could “stall” due to the uncertainty of Brexit negotiations and has revealed the investment bank has “contingency plans” ready for the outcome.< Speaking to the BBC, Lloyd Blankfein said that some of the progress that turned London into one of the world’s financial centres in recent years could be reversed depending on how Brexit is handled.

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

He added that with so much at stake there would need to be a buffer period of a “couple of years” after a Brexit deal is agreed in 2019 to allow firms to adjust and react to the outcome.

“If it takes a little while, I’d rather get it right than do things quickly,” Blankfein said. Without such a period, he warned organisations would have to act “prematurely” to protect themselves.

Despite reports that Goldman Sachs has begun moving hundreds of staff out of the City, he said it would prefer to avoid a large-scale move for its 6,000 UK staff.

“We don’t have big plans now,” he said. “We are looking, we are trying to avoid.”

He said that while the UK is currently a logical place for US companies to do business in Europe, that may change if they are not able to access the EU market from London.

“If you cannot benefit from access to the EU from the UK, and nobody knows what those rules and determinations will be, then the risk is there will be some adjustment that will cause some people to have a smaller footprint in the UK,” Blankfein said.

He added that by 2019 relations between the EU and the UK may have settled down somewhat as both parties focus on their long-term plans, rather than short-term tensions.

Photo © Dun.can (CC BY 2.0). Cropped.