HSBC and JPMorgan Chase are reportedly in talks to relocate parts of their operations to Luxembourg from the UK considering the possibility of a British exit from the European Union.
JPMorgan is set to launch a bank based in Luxembourg, which will manage clearing of eurozone transactions. This is expected to help the bank transfer more of its business out of the UK should a Brexit occur, the Times reported.
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However, the changes will likely not result in many job relocations to Luxembourg, as London would remain the bank’s European headquarters, the report claims.
"The transitional costs are likely to be substantial, as uncertainty over future arrangements would likely cause investment to fall and consumers to defer spending," the US-based lender was quoted as saying by the publication.
HSBC has also reportedly told the UK Treasury that it is weighing the possibility of relocating its headquarters from London to Luxembourg.
Shareholders of the bank has urged in April to mull relocation of its headquarters to Asia, owing to the high UK bank tax and other related costs for being headquartered in London.
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By GlobalDataThe banks are also weighing the tougher rules imposed by the EU for doing business outside of the eurozone.
