Wall Street Journal: Who Loses the Most From ‘Brexit’? Goldman Sachs


From the Wall Street Journal

A vast construction site in the heart of London is a testament to Goldman Sachs Group Inc.’s $500 million bet on the city’s global financial clout.

But the bank’s new European headquarters might be a little emptier than planned if the U.K. votes in June to leave the European Union, Goldman’s executives say.

The warning underscores a twist in what is turning into an increasingly fractious fight over whether the U.K. should opt for“Brexit”: the business groups that have the most to lose are neither European nor British.

No one knows what exactly would happen if the U.K. voted to leave the EU. The process could take years. The U.K. might be able to negotiate access for its banks to the EU. Or it might not.

But faced with the prospect of spending billions of dollars to rejig their operations, banks have been lobbying intensively against Brexit.

Among those leading the charge is Goldman Sachs. For three years, the bank’s executives have publicly warned about the downsides of leaving the EU. The bank has donated around $700,000 to a group which is lobbying against Brexit, according to a person familiar with the matter. Its executives have signed warning letters to major British newspapers. An EU flag currently flutters above its London headquarters. Last fall the bank organized events on the sidelines of opposition Labour and governing Conservative party conferences to debate the role of the U.K. in Europe.

…About a decade ago, Goldman launched project “Armada,” a plan for a hulking European headquarters on the site of an old telephone exchange in London.

Unbundling this kind of structure will be expensive and time-consuming, lawyers and bankers say.