LONDON (REUTERS) - 40,000 is the number of investment banking jobs Britain could lose, according to a new report. Banks are currently planning for a worst-case scenario where they no longer have access to the European single market once Britain leaves the bloc in 2019.
Many say they don't have time to wait and see how talks with Brussels unfold. Citigroup, Bank of America and Morgan Stanley, as well as Britain's Barclays have all indicated they are finalising plans to set up subsidiaries within the EU.
"A lot of the preparations that are being put in place are easily reversible, for example, so we'd be naive to think that these financial institutions aren't going to be putting plans in place in case the worst should happen as they can't afford to just stop functioning overnight," said Craig Erlam, senior markets analyst at Oanda.
Consultancy firm Oliver Wyman says initial moves could see around 12,000 to 17,000 banking jobs move out of London.
But with a number of issues still to be hammered out, that could more than double. Some, though, insist London's clout as a global financial hub will remain.
"The environment which there is here, once the uncertainty passes regarding these Brexit negotiations, is going to prove that London remains attractive for the same reason it was always attractive previously. This is where the talent is, this is where the expertise is. This is where the regulatory and legal environment is, that these companies were attracted to in the first place, and that's not changing," said Erlam.
Nicky Morgan, the new chair of Parliament's Treasury Select Committee has asked the Bank of England's top regulator to say if lenders are ready for a "hard" Brexit.
The bank wrote to hundreds of firms in April to ask how they would deal with an abrupt severing of ties with Europe.
Morgan wants a summary of the responses by Wednesday.