It appears that two of the investment banking industry’s biggest headaches are about to interact with each other to create a third, even worse pain. Everyone was already worried about the possibility of a “second wave” of coronavirus infections, as children go back to school, students go back to university and workers return from holiday destinations and start gradually returning to the office. Everyone was also a bit worried about the lack of progress on Brexit talks and the increasing likelihood that the transitional arrangements wouldn’t allow as many functions to be effectively managed out of London as the banks had hoped.
And now … because of worries that Brexit planning might once more get interrupted by a coronavirus lockdown, the European regulators are demanding that everything should be done a lot quicker. According to one person close to the ECB’s thinking, they are saying that “the summer period is a good time to move”, which might be a surprising statement to anyone who has tried to get lawyers and estate agents to do anything fast in the month of August.
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It looks like a lot of senior bankers may be spending the autumn and winter months in some very expensive and not necessarily very pleasant accommodation provided by their employers, taking weekend commutes to see their family and hoping not to get stuck on the wrong side of a quarantine announcement. That’s going to be yet another shock to the system, even for bankers who were getting psychologically ready for a new life in a new city. Ironically, families with children might be a little more likely to have been ahead of the game, as most of them were planning around the school year.
It’s unlikely that the regulators will sympathise all that much. They have been saying for years that they want European trading and banking business to be managed out of Europe, with the people in charge located somewhere that they can be visited and yelled at if necessary. The banks have had a while to prepare for this but have been dragging their feet. It’s hard to make a convincing excuse on the grounds that the pandemic has made it difficult to go house hunting, even though this is obviously true, and the word from the ECB is that “staff relocations can be delayed on account of new lockdown measures or travel restrictions only”.
So, it appears that the near term future for bankers in functions that are being transferred from London to Paris or Frankfurt could involve making the same Zoom calls, from an aparthotel in a block where half the restaurants are shut. It’s enough to make one feel nostalgic for homeschooling.
Daniel Davies – Read more on efinancialcareers.com