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Goldman Sachs, Morgan Stanley Step Up Pre-Brexit Frankfurt Hires

Bloomberg logoBloomberg 12/01/2018 Gavin Finch and Steven Arons

Watch: Banks meet May over Brexit concerns (Reuters)

Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are on a hiring drive in Frankfurt as global investment banks race to establish new headquarters inside the European Union in time for Brexit.

The biggest Wall Street firms have recently started advertising for scores of staff ranging from risk managers to compliance officers and information-technology specialists, according to internet listings. They need their offices to be up and running by April 2019, headhunters and people familiar with their firm’s hiring plans said.

Banks want to fill as many positions as they can locally to limit the disruption caused by relocating London-based employees and their families, said the people, who asked not to be identified as the plans aren’t public. With only about 14 months to go until Britain formally departs the EU, banks have reached what one executive called the point of no return, and have decided they need to trigger their contingency plans.

“Many banks are hiring now to meet at least the minimum staffing requirements" by the time Brexit happens, said Tim Zuehlke, a partner at FRED Executive Search.

Visitors take in the city skyline view from the 15th floor pantry area inside the European Central Bank (ECB) headquarters as skyscrapers tower over commercial and residential property in Frankfurt, Germany, on Wednesday, Oct. 18, 2017. In a tweet with the hashtag #Brexit, Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein on Thursday hailed “great meetings” he had in Frankfurt and said he will spend a lot more time there.: Views Of The Financial District As Goldman CEO Blankfein Tweets About Spending 'A Lot More Time' In Frankfurt © Photographer: Alex Kraus/Bloomberg/Bloomberg Views Of The Financial District As Goldman CEO Blankfein Tweets About Spending 'A Lot More Time' In Frankfurt Regardless of whether the U.K. can reach a two-year transition arrangement, EU regulators have made it clear they expect banks to establish full-scale, standalone operations inside the trading bloc staffed by significant numbers of both front- and back-office staff as well as senior employees, rather than so-called brass-plate offices with people commuting from London.

Risk Managers

Goldman Sachs plans to more than double its staff in Frankfurt to 400. The bank has already hired about half a dozen people locally, one of the people said, and is advertising for a further 10 vacancies on its website. Morgan Stanley intends to add about 200 roles in Germany’s financial capital. The bank is currently advertising vacancies for 17 positions in Frankfurt, including a "liquidity risk manager." 

U.S. investment banks "are intensifying recruitment for back office in Frankfurt," said Aleksandar Rakovic, head of banking for the headhunting firm Robert Walters. "Pay in those areas will continue to rise."

Given the scarcity of experienced bankers in Frankfurt -- there are 60,000 people working in finance in the city, compared with more than 360,000 in London -- firms are hoping that any shortfall will be met by German expatriates keen to return home, the people said. Given the likelihood of relocations by people of other nationalities, banks have already started block-booking places at international schools and leasing apartments in anticipation of a squeeze on local resources, they said.

As many as 10,000 new jobs may be created in the German city in the next few years, according to the lobby group Frankfurt Main Finance. By contrast, job openings in the U.K. capital’s finance industry fell 52 percent in December, the most in three years, recruitment firm Morgan McKinley said Thursday.

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