London’s standing as a global financial hub has become “fragile” in the wake of Brexit, according to David Solomon, chairman and CEO of Goldman Sachs, who revealed that the banking giant is expanding operations across the European Union at the expense of the UK capital.
Speaking on Sky’s The Master Investor Podcast with Wilfred Frost, Solomon said the bank has been redistributing talent across Europe as the effects of Brexit and shifting global dynamics make London less central than it once was before the referendum.
“The financial industry is still driven by talent and capital formation, and those things are much more mobile than they were 25 years ago,” Solomon said. “London continues to be an important financial centre. But because of Brexit, because of the way the world’s evolving, the talent that was more centred here is more mobile. We as a firm have many more people on the continent.”
Describing Goldman Sachs’ operational expansion outside the UK, he said: “If you go back, you know, ten years ago, I think we probably had 80 people in Paris. You know, we have 400 people in Paris now… And so in Goldman Sachs today, if you’re in Europe, you can live in London, you can live in Paris, you can live in Germany, in Frankfurt or Munich, you can live in Italy, you can live in Switzerland.
“And we’ve got, you know, real offices. You just have to recognise that talent is more mobile.”
While the bank still employs around 6,000 people in the UK, Solomon also issued a warning to chancellor Rachel Reeves against raising taxes on high earners, despite studies finding otherwise.
“If you don’t set a policy that keeps talent here, that encourages capital formation here, I think over time you risk that,” he said. “Incentives matter if you create tax policy or incentives that push people away, you harm your economy.”
While expressing “sympathy” for Reeves, he praised her focus on economic growth: “And now we have to see the action steps that actually follow through and encourage that.”