Bankers can’t stand the idea of Britain-less Europe.
By the day, analysts at the big banks are trying to out-do each other with scary warnings of Britain exiting the European Union — the so-called ‘Brexit.’
Goldman Sachs (GS) said leaving could cause the pound to crash by as much as 20%. The bank has already poured hundreds of thousands of pounds into the “stay” campaign.
Nomura (NMR) has warned Brexit could even push the U.K. into recession of about 2% from peak to trough.
UBS (UBS) estimated the loss to the British economy would be somewhere between 0.6% and 2.8% of GDP.
Banks are worried about Brexit, because they use Britain as a springboard for their business throughout Europe. Leaving the union could disrupt this link.
Related: Why you should care about Europe’s new deal for UK
Prime Minister David Cameron has promised the British people a vote on the ‘Brexit’ question by 2017.
He said he will campaign for the U.K. to stay in, provided the union of 28 states and over 500 million people is willing to reform. He called on businesses to campaign against Brexit.
While the citizens are deeply divided, bankers are very clear about their views.
Deutsche Bank (DB) said it might move its business away from Britain if the country chooses to leave the European Union.
And while HSBC (HBCYF) announced on Monday it would keep its headquarters in London, its bosses speaking to media after the announcement, hinted at the possibility of moving “jobs and activities” to Paris, if voters chose Brexit.
And JPMorgan Chase (JPM) warned it and other financial firms could leave, resulting in “jobs moving outside the U.K.”
Citibank went even further, saying Brexit could cost Britain 75,000 jobs by 2030.
What bankers think about Brexit matters, because the financial sector is key to the British economy. It accounts for 8% of the country’s GDP, and 3.4% of all British jobs.
London is the world number one location for foreign exchange trades, with more than 40% of global trades taking place in the City. The U.K. has the fourth largest banking and third biggest insurance sectors globally, and it is the world’s center for commodities and derivatives trading.