Goldman Sachs To Expand EU Operations During Brexit

Wall Street bank Goldman Sachs will begin processes to relocate business operations in their European arm away from London to mainland Europe, according to the firm’s CEO.

Large financial firms have long voiced a need to create contingency plans in the event of “Brexit”, or Britain leaving the European Union (EU), an event that many claimed would severely upset the county’s financial stability, according to the BBC.

“We are going to start to execute on those contingency plans,” explained Richard Gnodde, CEO of Goldman Sachs International, the European part of the firm.

“It’ll be a combination of things,” said Gnodde. “We’ll hire people inside of Europe itself and there will be some movement.”

According to Gnodde, Goldman Sachs plans to embark on a hybrid of business ventures, many of which will expand business operations.

“We start with a significant European footprint, we are licensed with banks in Germany and France,” said Gnodde of Goldman Sachs operations in Europe.

“In the next 18 months we will upgrade those facilities, we will be taking extra space in a number of them, and we will be increasing headcount and capability and infrastructure around those facilities.”

Britain’s imminent break from the EU has brought to light the fact that there is an apparent lack of concrete separation measures for financial firms, relegating many to their own contingency plans, according to CNBC.

“We can’t bank on them so we have to have contingency plans and that’s what [we] are going to start to execute on,” said Gnodde.

Information that has emerged since Britain voted on Brexit has extinguished financial firms’ hopes that they would be able to keep “passporting” rights, or the ability to sell services in the EU from headquarters in London.

Gnodde emphasized that the move to expand business operations in mainland Europe did not imply a total break from business operations in Britain.

“Whatever the outcome, London will remain for us a very significant regional hub and a significant global hub,” explained Gnodde.

“This is in the hundreds of people as opposed to anything greater than that,” said Gnodde.

British Prime Minister Theresa May plans to initiate a departure from the EU on March 29, which will begin two years of proceedings which will shed more light on the economic future of her country, according to Reuters.

Gnodde was careful to clarify that the Goldman Sachs contingency plan does not, in fact, represent the final organization of the company once Britain’s financial future has been realized.

Sources: CNBC, Reuters, BBC/Photo Credit: Dow Jones Events/Flickr