Can Barclays Thrive in a Post-Brexit London?

In the aftermath of Brexit, can Barclays still attract the talent it needs to be a market leader without abandoning London and relocating to Frankfurt?

London has long been acknowledged as one of the premier financial cities of the world.  The City of London, which is akin to New York’s Wall Street, is home to more than 250 banks and a multitude of other companies that provide services and assistance to the financial institutions.[1]  Yet, despite the multitude of financial companies currently housed in the City, there are now increasing questions about its future as a global financial center.  Lloyd Blankfein, the CEO of Goldman Sachs, one of the pre-eminent American banks, recently tweeted: “Just left Frankfurt.  Great meetings, great weather, really enjoyed it.  Good, because I’ll be spending a lot more time there.  #Brexit”.  Like many other global financial firms, Goldman Sachs is re-evaluating its position in London in the wake of “Brexit”, the British referendum to unilaterally withdraw from the European Union.[2]  An American bank is not as tied to London as a major British bank, however.  In this paper, I’ll attempt to address the challenges and opportunities facing Barclays PLC, a major British bank, as it navigates through a post-Brexit world.

Barclays PLC can trace its lineage back more than 300 years to two goldsmith bankers in London.  Since then, the company has grown to employ more than 130,000 people across banking, investment banking, and investment management.[3]  At the end of 2016, the company posted more than 21 billion pounds in total income across these major functions.[4]  Though not a traditional manufacturer with a supply chain of raw materials feeding into a production process, Barclays still requires certain inputs to remain competitive and provide effective services to its clients.  London has traditionally provided these inputs to Barclays in the form of a strong network of businesses, lawyers, and accountants as well as access to European markets.  Pascal Boris, the former CEO of BNP Paribas UK, explained the labor market in the mid-2000’s as follows: “It becomes a self-fulfilling prophecy… If you want to be hired you go to where people will hire you: London is this magnet in Europe.”[5]

Given the importance of talent to Barclays and other banks headquartered in London, it’s no surprise that there is concern that Brexit will cut off access to the European market and thus drive away the talent that fuels financial services.  Research analysts warned ahead of the Brexit referendum that Barclays was the most exposed to negative effects from the EU withdrawal based on its reliance on investment banking and corporate banking.[6]  The network effect that draws talent to London will gradually decrease as more firms take their operations to Dublin and Frankfurt, as several large banks have already announced they will do in the wake of Brexit.[7]  It is therefore a major concern for Barclays that keeping their headquarters in London will provide an opening for their competitors.

Unsurprisingly, Barclays has already taken some steps to try and mitigate the risks to their talent pool and revenue stream from Brexit.  Jes Staley, the CEO of Barclays, has already announced that the company will split into two divisions, with U.K. retail banking remaining in London and corporate and investment banking headquartered outside the U.K.[8]  He also emphasized that credit card operations are split 50-50 between the U.K. and the U.S. and Germany. These steps towards diversification will help to mitigate the damage of Brexit, but unfortunately still leave Barclays quite exposed to the fallout.  In the mid to long term, Barclays seems primarily focused on divesting itself of several of its overseas assets, including retail banking in continental Europe, wealth management in Asia and the United States, and banking in Africa.[9]

Although Barclays seems to be making efforts to restructure in the wake of Brexit, I see their tepid steps at moving out of London as being their most serious shortcoming.  Already, competitors are moving to Frankfurt and Dublin en masse, with estimates for the number of jobs to depart London rising as high as 250,000.[10]  Frankfurt seems the most logical choice for a new financial center, given the presence of the European Central Bank and several other financial institutions.  Barclays should accelerate the departure of their corporate and investment banking arms from London to secure real estate and talent ahead of their competitors.  Delaying this move in the hope that Brexit negotiations will succeed in maintaining British access to the European markets seems a dangerous gamble.  By utilizing cash gained from the divestiture of global assets, Barclays has a unique opportunity to break out of the Brexit death spiral and re-establish themselves as a pre-eminent European bank.

The questions I pose to my classmates are as follows:

Can the U.K. achieve a “soft Brexit” that maintains access to European markets?

Is London’s reputation as a financial capital irreparably harmed? (Word Count 798).

[1] Nesvetailova, A. (2017). Politics, capital and the City: London’s financial reign in the face of internal and external shifts. Economy and Society Volume 46, 153-158. Retrieved from

[2] Proactive investors: Goldman Sachs group boss takes hit at Brexit with Frankfurt tweet (2017). Chatham: Newstex. Retrieved from

[3] A Quick History: from Goldsmith’s Shop to Global Business (2017), Retrieved from

[4] Barclays PLC Annual Report 2016, 277, Retrieved from

[5] Finance and economics: Capital city; London as a financial centre. (2006, Oct 21). The Economist, 381, 96. Retrieved from

[6] Holt, N. (2016, Jun 14). Barclays ‘most exposed’ to Brexit fallout. Fundweb, Retrieved from

[7] Meager, L. (2017). Frankfurt surges in Brexit battle for London’s business. International Financial Law Review, Retrieved from

[8] Dunkley, E. (2016). Barclays says Brexit will not curb London’s ‘gravitational pull’. FT.Com, Retrieved from

[9] Jes Staley, Ceo, Barclays, Is Interviewed On Bloomberg Tv Regarding Brexit And Financial Institutions (2016). Washington: CQ Roll Call. Retrieved from

[10] Meager, L. (2017). Frankfurt surges in Brexit battle for London’s business. International Financial Law Review, Retrieved from


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Student comments on Can Barclays Thrive in a Post-Brexit London?

  1. A major point that this article highlights for me concerns the supply of talent. While one of the author’s key insights is that moving quickly (to Frankfurt or elsewhere) can give Barclays a head start on talent acquisition, one of the implicit assumptions concerns how mobile that talent will be. To the extent that Brexit comes with a loss of free movement of people – which seems likely, given the UK’s stance on immigration and its role in encouraging Brexit – British bankers may have a more difficult time relocating than other European bankers have traditionally had when moving to London. This effect would decrease the overall stock of potential bankers in a new European hub, which points to speed’s advantage, but the effect would exist only if existing talent is unable to move. Should that be the case, one risk Barclays (and other banks) face in relocation is the possibility they will have to massively restructure their teams above and beyond the physical relocation.

  2. Nice article Steve. I don’t think that London’s reputation as a financial capital is irreparably harmed yet, but I do think it likely will be in the coming years. If the U.K. does not achieve a “soft Brexit” and keep access to European markets and unrestricted labor movement, many of the financial companies will lose all trust in the government. A soft Brexit seems unlikely given the current political climate. As you mention a “hard Brexit” will not only result in many firms leaving the country, but it will also prevent firms from returning to London anytime in the near future. The process for finalizing Brexit is scheduled to take another 18 months and it will be interesting to see how it plays out. I think London will likely see its reputation further damaged when the exit negotiation is finalized.

  3. I tend to disagree slightly with Nick’s comment above that London’s reputation as a financial capital is irreparably harmed. As one of the big four banks in London, Barclay’s has decided to move the division that requires the most talent, investment banking, out of London. Additionally, HSBC has stated that they may be moving up to 20% of their investment banking roles out of London [1]. As Nick has pointed out, the “soft Brexit” seems relatively unlikely and organizations do not want to be left without the ability to attract top talent from Europe and thus will be making defensive moves to prevent talent exodus.

    [1] Stephen Morris and Richard Partington. Independent. “Brexit: HSBC may move 20% of its London banking operations to Paris, chief executive Stuart Gulliver says. January 18 2017. “” Accessed November 30 2017.

  4. Nice read, Steve. A few key points that stand out to me and need to be further considered by Barclays and other banks in the ongoing debate over Brexit-influenced job relocation, particularly as they relate to location selection are:

    1) Relocation of jobs out of London are not all necessarily transitioning to other EU countries. Some banks and institutions are thinking of bringing certain jobs that were in London to the United States, partly due to ease of business in US. This is perhaps most applicable to US-based companies that are in Britain, but I would imagine given Barclays’ large presence in the US, this would be an option on the table.

    2) Unlike “Alex Robinson’s” post above, which highlights the immigration frictions and frictions in trans-border mobility, I believe the bigger issues will be cultural / socio-political. Partly in line with 1), talent migration is an important piece of the overall relocation strategy and enticing people to move to Frankfurt from a family lifestyle and education perspective may not be that easy. On the other hand while a location like Paris (where HSBC has decided to move some of its employees there) may be better from a cultural perspective, there are political realities in France on how much bonuses banks can pay and how banks fund into social security for employees, which may be meaningful over time in retaining key talent.

    A question I have on the “software” component of re-location, is: once people move to the new locations, how will they culturally interact with the local employees? Will there be communication / cultural problems that make doing business and serving clients difficult?

  5. Great essay, Steve. I enjoyed your willingness to look beyond the typical prism through which commentary has analyzed the tension between banks’ operations in London and Brexit, namely via addressing the extent to which MIFID passporting and euro-denominated clearing can be retained in a post-Brexit world. (1)

    In the unfortunate consequence of a hard Brexit, there are a couple of structural advantages that may enable London to maintain its status as the financial capital of Europe. Firstly, the flexibility of the UK’s labor laws compare favorably to those of France and Germany. Also, London benefits from access to graduates from the UK’s higher education system, which continually ranks as the strongest in Europe. (2) Finally, Barclays’s management should consider ascribing value to the strength of its special relationship with the UK, and should be concerned about the deterioration of the Barclays brand in the UK in the scenario that substantial operations are moved out of London. Concurrently, I would be interested in exploring potential strategies for how, post a move to Frankfurt, Barclays could differentiate its own value proposition from those of other European banks.

    (1) Gavin Finch, Bank’s Brexit Future Hinges on Passporting Rights, Bloomberg, 19th October 2016,

    (2) QS Higher Education System Strength Rankings 2016,

  6. Thank you for a great summary of the situation that a number of financial institutions are facing since the Brexit vote in 2016, Steve.
    My first thought is related to Alex Robinson’s comment above: while a number of banks will decide to relocate to other European cities, a proportion of London’s current top talent will not be able to relocate. Graduates of the top schools in the U.K. will still, at least until the consequences of Brexit are better understood, want to work in London. As a result, I do not think that Barclays, if indeed it decides to keep a large office in London, will struggle to attract top talent. It might actually in the short-term increase the pool of talent, as other supply options are not available anymore.
    In addition, I’d like to point out the recent decision by the European Banking Authority (EBA) to relocate to the beautiful city of Paris, France [1], while the European Medicines Agency will relocate to Amsterdam. France’s win could therefore play in its favor to become Europe’s next financial center, although Frankfurt is still current winning that spot [2]

    [1] European Council Press Release. “European Banking Authority to be relocated to Paris, France” November 11, 2017 []
    [2] Miller, Joe. “Frankfurt is winning the battle for Brexit spoils” BBC News, August 29, 2017 []

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