Officials in Dublin, Paris and Frankfurt have wasted little time in trying to encourage financial-services companies based in London to move now that Britain is leaving the European Union.
IDA Ireland, which promotes foreign investment in the country, issued a statement within hours of the release of the final referendum results on Friday, saying it hoped to take advantage of Brexit.
"Ireland will remain a member of the European Union with full market access and that will be attractive to investors," said Martin Shanahan, the chief executive of IDA. He added that "the fact that Ireland is English-speaking and a member of the EU and euro zone is also attractive."
Paris, too, is looking to cash in. Earlier this month, city officials launched a "Welcome to Europe" campaign aimed largely at London post-Brexit.
A win for Brexit means "it is not just companies that may decide to leave, but also the talents which make this marketplace so attractive and who feel a real attachment to Europe," Jean-Louis Missika, a deputy mayor of Paris said at the time. "We intend to establish the necessary conditions to welcome these talents."
Britain's vote last week to leave the EU has been seen as a blow to London's financial centre, known as the City, because financial firms will lose so called EU passport privileges, which allow them to set up in one country and conduct business across the EU. London dominates European financial services, with City firms managing an estimated 40 per cent of all European wealth and handling the vast majority of trading in euro-denominated derivatives.
The European Central Bank has been pushing to have more euro-denominated trading done in a euro zone country. So far, Britain has been able to successfully block that move through the European Court of Justice, but that will be harder to do once the country is outside the EU. A report by accounting firm PWC said that Brexit could result in up to 100,000 jobs lost across Britain's financial sector, which employs about 2.2 million people.
On Saturday, the head of France's central bank made it clear London will lose its passport privileges unless Britain can negotiate a new arrangement with the EU.
"As long as Britain is in the single market, the City can remain a big European financial centre. If tomorrow, Britain is not part of the internal market, the City cannot keep its European passport," Bank of France Governor François Villeroy de Galhau told French radio. "What happened on Thursday is bad news, first of all for Britain. Of course, there will be negative consequences for the European economy, but they will be much more limited than the negative consequences all experts forecast for the U.K. economy."
Some big financial firms have already indicated they will shift staff out of London. Jamie Dimon, chief executive of JPMorgan, said before the referendum that up to 4,000 of the company's 16,000 employees in London could move. HSBC has also indicated that it may shift 1,000 of its British staff to Paris. And there have been reports that Morgan Stanley and Goldman Sachs are considering moving 1,000 and 2,000 staff, respectively, to Frankfurt.
Canadian banks, insurers and brokerage firms with operations in London have been coy about their plans. Shares in many banks, including Canadian, took a beating last Friday after the referendum results came in with some British bank stocks falling 30 per cent before recovering by the end of trading.
For now, most financial institutions will be waiting to see how quickly Britain leaves the EU and under what terms. That process could take many years and Britain is expected to push for a deal that would include some form of passport privileges. But the mood in many EU circles is not very amenable toward Britain right now and negotiations could be difficult.