Goldman Sachs shifts some London traders to Milan

Bloomberg

Goldman Sachs group Inc is shifting some of its euro swaps trading desk to Milan from London, the latest example of roles moving to the continent after Brexit.
The Wall Street giant is relocating staff as it bolsters European offices in the wake of the UK’s departure from the European Union, according to people familiar with the matter. Staff will likely move early next year and Goldman will also be hiring staff locally.
A spokesman for Goldman declined to provide details or numbers of people being moved while the relocations are being finalised. The firm currently has around 80 employees in Milan.
Some of the world’s biggest banks are under pressure to move more traders from London into EU cities such as Paris, Frankfurt and Amsterdam. The European Central Bank (ECB) said in May that lenders who set up units in the euro area are still too dependent on operations outside the region, and found that about a fifth of the trading desks it reviewed “warranted targeted supervisory action.”
“Due to changes in the regulatory framework, Milan is now capital-market friendly,” Russell Clarke, partner at Figtree Search in London, said.
JPMorgan Chase & Co. employs about 200 staff in Italy and is continuing to add more. It’s recruiting for nine new roles including two executive directors, one working on lending advice and the other advising clients on asset management.
It’s not just banks. Euronext NV in June opened a data center in Bergamo, about an hour from Milan, after relocating it from the town of Basildon outside of London. The operation facilitates a quarter of European equities trading,
according to CEO Stephane Boujnah.
To be sure, Milan remains a small player. Some 78% of Europe’s fixed-income traders are still based in London, down from 85% five years ago, according to data from Vali Analytics. Paris is in second place with around 14%.
But some high-net worth individuals, bankers and fund managers are moving to Milan, partly lured by a favourable tax treatment. Italy allows new residents to pay a $104,000 flat rate on profits made abroad or pay no taxes on as much as 70% of income.
“Italy has been on the cards for a while as a lot of Italians would like to return home and take advantage of the tax break,” Jason Kennedy, chief executive officer of the recruitment firm Kennedy Group, said.
Nomura Holdings Inc. has said it wants to grow selectively in Milan, and recently hired Elena Agosti, a Goldman and JPMorgan veteran, who runs an all-woman desk from the city.
“Finally after years in trading there are enough women to find themselves on the same team,” Agosti said in an interview.
Other banks may look to move trading in European bond and currencies into the EU following strong performances during the third quarter, according to Jordan Galhardo-Burnett, principal and head of publications and insight at Expand Research.
“As we get into the medium-to-long-term there is likely to be a slow trickle” of jobs moving, he said. “Milan is well-placed.”