E EUR 32 Billion Gone - UBS Redirects Funds To Frankfurt

The tension in Europe keeps mounting as there is no clear decision being made about the Brexit deal. The GBP has been suffering tremendously as more political uncertainty keeps mounting up. The biggest fall within the last couple of weeks was because of the rejection of the Brexit deal proposed by the UK Prime Minister, Theresa May.

Because of such uncertainty, the economy has been suffering alongside the currency, which has become a topic of concern for some companies, mainly financial institutions.

The concern is so high that some of them have even decided to withdraw either completely or partially from the island. The best example is UBS Bank. The Switzerland-based bank has been operating in the UK for a number of years, but the economic uncertainty is endangering that partnership.

According to reports the company is now withdrawing more than EUR 32 billion from the country and re-directing it to their Frankfurt branch. The reason as already mentioned is the economic uncertainty, but the bank has another one. They want to cater to EU clients more than UK clients at this point.

Despite the fact that in terms of Financial industry, the UK is one of the largest markets, most companies are now seeing the vast opportunities in the EU, since the major damage from Brexit will be directed to the UK and not the EU.

A terrible example

No matter how hard UBS’s withdrawal of such a large amount of funds can affect the UK economy, it is dwarfed by the previous decision that a similar company made. Barclays, one of the largest Financial institutions in the company had decided last week that it was time for them to “transition” slowly our of the UK as well. Filing a request to approve a $217 Billion “transfer” from it’s UK branch over to their Ireland branch.

Unfortunately, the funds aren’t the only assets being directed out of the UK as companies follow up with staff transfer as well. Although it’s not a lay-off, it’s still a reduction of the UK workforce. The astounding 5,000 worker-strong workforce that UBS has in the UK will be seeing a downgrade of 200 people, which will be accompanying those 32 Billion EUR to Frankfurt, according to reports from the company.

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