Brexit: New York 'already a gainer' from UK's decision, says Goldman Sachs CEO

Investment banking chief said he had been moving as much business to UK as possible before vote but is now 'slowing down that decision'

Goldman Sachs cheif executive Lloyd Blankfein said Brexit vote was primarily an anti-immigration vote
Goldman Sachs cheif executive Lloyd Blankfein said Brexit vote was primarily an anti-immigration vote

Goldman Sachs chief executive Lloyd Blankfein said New York is “already a bit of a gainer” from Brexit as the Wall Street firm slows its previous policy of moving operations to London.

“Operating our business to maximise our global potential -- we were trying to get as much into the UK as we could,” Blankfein said in a Bloomberg Television interview on Thursday with John Micklethwait at the World Economic Forum in Davos, Switzerland. “We’re slowing down that decision” to avoid having to move businesses twice, he said.

Blankfein and other Wall Street bosses are privately meeting British Prime Minister Theresa May later Thursday as banks mull what staff will need to move given the UK’s likely loss of passporting rights, which give London-based bankers the ability to service clients across the European Union. A Goldman Sachs spokeswoman said Wednesday that the firm hadn’t made any decisions after Handelsblatt reported it may cut its London staff in half to 3,000 workers.

“I don’t know if there will be one one or ‘ones’ that we will go to,” Blankfein said of potential destination cities, noting that the bank used to be spread out across the region, running large operations in cities like Paris, Frankfurt and Milan. “It wasn’t the most efficient way to run our business. It wasn’t the safest way to run our business. It’s better to have people in a concentrated place where you can watch them. Technology is more expensive if people are distributed.”

However, “we know how to operate in that fashion,” he said. “We have done it before.” It’s too early to say what businesses might move, he said. “I don’t think we will need two years to make whatever adjustments we make, so we’re watching.” He also said he worried about the EU with Britain outside of it.

Blankfein said May’s Brexit strategy, where she ruled out staying in the EU’s single market to gain control over immigration, is “not anti-Goldman.”

“I take the vote as primarily a vote on immigration,” he said. “As a politician, that has to be her declared priority. The financial-services industry is so important to the British economy, the thing will speak for itself. That will become an important priority. It won’t be dominant.”

Blankfein, whose firm has seen executives and former staff like Gary Cohn and Steve Mnuchin take on assignments to work for U.S. President-elect Donald Trump, also said he wouldn’t “preclude” serving in government himself someday.

Trump’s policies are “quite market-supportive” and stimulative on taxes, regulation and infrastructure, he said. Blankfein also said he “doesn’t find fault” with Trump if he seeks to renegotiate trade agreements to be more in favor of U.S. interests.

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