US banks are pulling extra property out of London forward of the essential Brexit deadline

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London’s position as a one-stop shop for American banks doing business in Europe is becoming less important as lenders speed up the movement of people and assets from the UK to the continent before the Brexit transition period ends on December 31st.

For decades, American banks poured resources into London as it became the gateway to Europe’s rapidly developing capital markets and securities trading was deregulated. Now hundreds of employees at banks such as JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley are moving to Frankfurt, Paris and other European hubs before the transition period ends.

Accounting firm Ernst & Young estimates £ 1.2 trillion ($ 1.5 trillion) of bank assets to flow from the UK to continental Europe, up from a forecast of $ 1.3 trillion in late 2019. JPMorgan is moving around $ 230 billion in assets from Great Britain to his German branch to support trade and European customer service there. US banks in London say they are also gradually transferring European customers to new EU contracts.

People move too. Since the British voted to leave the European Union in 2016, more than 7,500 financial services jobs have moved from the UK to the European Union, including 400 announced in recent weeks, according to EY’s latest figures. That’s still a fraction of the total financial services jobs in London, which is widely expected to remain the largest financial center in the region. However, bank officials say this is only the first wave in reshaping a European financial sector that has long been dominated by the UK capital.

Dorothee Blessing, JPMorgan’s co-head of investment banking in Europe, the Middle East and Africa, said at a conference last week that the bank will initially relocate around 200 jobs, but more will follow, particularly in back-office functions such as risk and compliance. She said a recent spike in coronavirus infections in the UK and other European countries has made the bank’s plans more complex.