- EU leaders should address rational objections behind vote
- JPMorgan CEO says the market correction may become worse
Jamie Dimon, chief executive officer of JPMorgan Chase & Co., said Brexit is unchartered territory and there would be nothing wrong in changing course.
Europe should address Britain’s “legitimate complaints” about labor rules, bureaucracy and regulation, Dimon said in an interview with Italian newspaper Il Sole-24 Ore. Policy makers should act swiftly to avoid a more complicated situation in a year or two, in which case the market correction would be worse, he said.
“Maybe you can even reverse Brexit,” Dimon said. “There are always solutions to the problems, as long as you have the right people in the room.”
Henri de Castries, Axa SA’s chief executive officer, said last week that the odds the U.K. will reverse its vote to leave the EU are “low, but not zero.” He said rules for officially starting Britain’s departure leave room for interpretation, while negotiating positions may converge as the repercussions of Brexit become clearer.
Asked about possible staff moves, Dimon said the crucial question was the so-called passport rule, which allows lenders in the U.K. to work with EU counterparts.
“If we have that passport after Brexit, we likely would not have to make any change at all,” said Dimon, whose bank employs 16,000 people across the U.K. “But I think the European Union will not accept that. It will put more conditions on the U.K. and might force banks to become smaller in London.”
“We do not know what is going to happen,” he said. “The worst case is that we might have to relocate a few thousand people to other offices in the eurozone, though the majority would stay in the U.K.”
Dimon said Brexit would slow down the eurozone and British economies but probably wouldn’t cause a recession. Asked whether markets overreacted to the surprise outcome of the U.K. referendum, Dimon said the world adjusted rationally to a new reality.
“There is going to be more uncertainty than many people thought going forward so the market reacted to that,” he said. “So this is rational thinking, assets are going to be worth less, there is going to be less credit risk.”
Christoph Stanger, co-head of EMEA equity capital markets at Goldman Sachs, said at an event in Frankfurt on Wednesday that the banking sector could take Brexit as a chance to re-evaluate costs and job cuts. He said Goldman Sachs was not taking any immediate action as all scenarios were still possible, including Brexit not happening.