The chief executive of Deutsche Bank, John Cryan, has said that Brexit may be “worse than people could imagine”.
In an internal staff video, Cryan said Deutsche Bank was preparing for a hard Brexit.
“We will assume a reasonable worst, I mean the worst is always much worse than you could imagine, i.e not much of an agreement that’s helpful to the financial services industry,” he said in the video.
Cryan confirmed that some of the bank’s London jobs and assets would move to Frankfurt.
“There’s an awful lot of details to be ironed out and agreed depending on what the rules and regulations turn out to be,” Cryan said, adding: “We will try to minimise disruption for our clients and for our own people but inevitably some roles will need to be removed or at least added in Frankfurt.”
He explained that investors would not buy, for example, Italian government bonds in London if London is not in the EU.
He said: “They wouldn’t buy them in the Tokyo branch today, or even in the Zurich branch. You’d be worried about some imposition of a tax, a withholding tax, or some frictional cost to not operating in the EU.”
The bank would maintain a duplicate of its infrastructure in London, at least during the transition period, Cryan said.
However, he did not think that Brexit would necessarily be a disaster for London.
Deutsche Bank did not want to comment.
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