Since Brexit, the major international banks have been playing cat and mouse with their supervisor, the European Central Bank (ECB). As the United Kingdom no longer belongs to the single European market, it has lost, among other things, the famous “financial passport”, which allowed it to sell financial products from London throughout the European Union (EU). From now on, this work must be carried out from one of the countries of the Union.
This is why establishments like JP Morgan or Bank of America have significantly developed their presence in Paris, for example. Or that there were, in 2021, nearly 2,000 bankers earning more than 1 million euros within the Twenty-Seven, an increase of 41% compared to the previous year.
From the beginning, however, banks have done everything to limit as much as possible the number of positions they outsource. Barely ten thousand jobs were directly transferred from London to other European capitals, according to a count by the firm EY.
Annoyed, the ECB insists that the work is actually carried out on EU soil, with high-level leaders present on site. In May 2020, seven months before the United Kingdom’s effective exit from the single market, she banged her fist on the table, launching a major assessment of the necessary relocations, bank by bank, business by business. In November 2023, it highlighted that it had identified 56 brokerage teams which must be either entirely in the EU or “with significantly increased local capacities”. “The ECB will not tolerate empty shells”she recalled.
Unfair dismissal
The latest illustration of this showdown was revealed by the Financial Times, Sunday February 18. According to the British financial daily, Morgan Stanley tried to deceive the ECB. The American bank granted the title of “loan brokerage manager” to an employee based in Frankfurt (Germany), who today claims that his real job was not that and that he had no managerial functions.
The information became public because the banker in question – whose name is not revealed – was fired by Morgan Stanley and he went to court for unfair dismissal. During the hearing, he assured that the American bank had asked him upon his hiring, in April 2021 (for a salary of 375,000 euros, plus bonus), not to use this title. According to his superior, this function “only existed on paper” and was created to give the ECB the impression that a high-ranking executive was present. Its real role was brokering bad debts in Germany, Austria and Switzerland.
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