Bank of America has stated they will make Dublin their EU headquarters after Brexit, boosting their workforce initially to 700 people with potential for far more.
The banking giant’s Irish American CEO, Brian Moynihan, said Dublin was the natural choice considering the large number of staff already working there.
Bank of America are deeply involved in Ireland, partly funding the Ireland Fund and U2's "Music Generation" scheme to bring access to learning music into every school in Ireland. CEO Moynihan told Irish America Magazine in 20089that one of his formative experiences was traveling around Ireland with his family in a bus.
"We went last August . We took my father and mother, and three of my siblings and our children went, so we had about 18 people traveling around in a bus, and it was a lot of fun. We went to Dublin for a few days and then took off down to the southwest. We had a bus driver who had that great Irish humor; we just laughed."
The company is already well established in Ireland. "Dublin is the home of more of our employees than any other European city outside of the UK,” Moynihan said.
"We already have a fully licensed and operational Irish-domiciled bank which, combined with Ireland's strong commitment to business and economic growth, makes Dublin the natural location to consolidate our legal entities as we transition.
"While we await further clarity around the Brexit negotiations, we are making all necessary preparations to serve our clients however those discussions conclude."
Other banks have also indicated that they will look to Dublin to serve as their HQ in what’s left of the EU after Britain leave in 2019.
Citigroup has said they will hire new people for their Dublin office, Morgan Stanley is currently deciding on whether to hire another 20-50 people and Barclays is hoping to add staff as well.
Brexit negotiations are still in their infancy and it’s not yet clear what how banking relationships will operate between Britain and the rest of the European Union after 2019.
Bankers in the City of London are worried that they will lose their “passporting” rights, which give British banks the right to operate across the European Union without asking for licenses from each individual country.
The head of the German Central Bank, Jens Weidmann, has said such rights were "tied to the [European] single market and would automatically cease to apply if Great Britain is no longer at least part of the European Economic Area".
The head of the Bank of England, Mark Carney, has urged negotiators to recognize regulatory systems in Britain and the rest of the EU were closely aligned and continue to allow banks to operate in each other’s jurisdictions.
“There are greater financial stability risks on the continent in the short term, for the transition, than there are for the UK,” he told a committee of British parliamentarians.
Minutes leaked to the Guardian suggest that the EU’s chief negotiator, Michel Barnier, believes limiting EU countries’ access to the City of London would damage the bloc.
Some very specific work has to be done in this area,” he is said to have told European legislators in private. “There will be a special/specific relationship. There will need to be work outside of the negotiation box… in order to avoid financial instability.”
A number of European countries with large national debts, such as Italy and Greece, are worried that without access to the City of London the cost of borrowing and servicing that debt will jump substantially.
Others, such as France, hope to use Brexit to lure banking business to their own country.
Clarity on the issue will emerge on the issue as the Brexit talks continue.