Hopes are pinned on luring two more US investment banking giants to Ireland in the coming weeks, as global banks decide on new homes outside London following Brexit.
Morgan Stanley and Bank of America Merrill Lynch are now heavily tipped to move at least some jobs out of London into Dublin, according to market sources.
After multiple reports over several weeks, Wall Street giant JPMorgan confirmed it was setting up at least part of its home in Ireland and is buying a 130,000 sq ftbuilding, which is under construction in the Dublin docklands.
For regulatory purposes, global investment banks must find new European homes inside the EU when the UK formally leaves the bloc in less than two years’ time.
JPMorgan already has 500 employees in Ireland and the new building will likely help it accommodate up to 500 more posts which would otherwise be based in London
The Irish authorities are courting the largest Wall Street investment giants at an early stage because the big banks have to make contingency plans earlier than other financial firms because of the scale of their activities and regulatory oversight spanning the US, the eurozone, and the UK.
In time, all London-based international banks which currently can freely sell their services across the EU through so-called “passport-ing” rights will have to decide which EU financial centre to call their home after Brexit is completed.
Though talks have yet to start, the UK has said it will not opt to stay in the single market at this stage.
The authorities here are for the moist part competing against Frankfurt and Luxembourg. They hope that the confirmation by JPMorgan will help to encourage other investment banks as they weigh their decisions in the coming weeks.
However, that does not mean that Ireland would secure all the jobs that the investment banks would likely shift out of London into other European centres.
Morgan Stanley is reportedly also casting an eye over Frankfurt. Goldman Sachs has reportedly opted for Frankfurt, while Barclays may yet decide on Dublin.
Nonetheless, securing some of the jobs from two more investment banking giants could help encourage other banking and asset management firms to locate in Ireland.
According to estimates, about 9,000 jobs could be up for grabs in the first wave of decisions by the largest global banks this autumn.
Thousands more jobs may move out of London but most likely to Frankfurt or Paris if the massive euro payments clearing operations were to shift from the UK.
IDA chief executive Martin Shanahan said JPMorgan’s decision to expand here was “a strong vote of confidence in Ireland and its expanding international financial services sector, and shows that our track record, pro-business environment, highly skilled talented workforce and an unwavering commitment to the European single market continues to appeal to investors”.
“IDA has been constantly engaged with JPMorgan over the past number of months,” he said.
“We are delighted that the company has selected Dublin to grow some of its businesses and confirmed in recent weeks that our capital city will be one of the anchors for their post-Brexit European operations.”
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