Though the flurry of headlines surrounding the U.K.'s Brexit vote has subsided to some degree in recent months, the implications of the decision for the country's financial institutions remain severe. At the start of 2017, JP Morgan (JPM) head Jamie Dimon has issued an ultimatum, saying that his company may move jobs away from London at an accelerated rate if the British government cannot settle on a transition deal with the EU, thereby stabilizing financial markets in the region. Simultaneously, Parisian banks have seen an opportunity to lure thousands of British financial workers to French banks and operations in the wake of the Brexit move. What will be the ultimate effect on the British financial world?

Dimon Cautions Against Severing of EU Ties

Many financial institutions in London are pushing for continued access to the single market of the EU for a period of multiple years following the planned two-year Brexit transition period. Should the British government not grant an extended handover time, Dimon and others have concerns that the financial markets will experience significant turmoil as financial companies in the U.K. lose the opportunity to sell services in continental Europe, known as passporting rights.

What would happen if Dimon moved his operations out of London? Currently, JP Morgan has about 16,000 employees in the U.K., and Dimon has already cautioned that the company may move one quarter of that group out of the area in the aftermath of Brexit. In a recent interview with Financial News, Dimon suggested that scenario was appearing increasingly likely. "If there is not a clear transitional period decided early in the process...then we'd likely have to accelerate our timetable in complying with new rules," he said.

Paris Looks to Entice British Workers

According to Europlace, Paris' lobby group, French banks are looking to meet with London-based financial executives to draw British employees across the border. HSBC Holdings has indicated plans to move 1,000 employees between Paris and London, and Citigroup has considered moving portions of its London operations to Frankfurt.

While companies weigh the risks of remaining in London, many firms are also looking to other areas in the region as new possibilities. IDA Ireland confirmed with Bloomberg that it has received a "significant" number of inquiries from global firms. Europlace and other Parisian-based finance companies are likely to argue that Paris is a natural home for displaced British employees and institutions, as the French capital already employees close to 200,000 financial services workers. Frankfurt, on the other hand, has just 100,000, while Dublin has only 30,000. Regardless of which city or country wins out in negotiations, it seems inevitable that the state of British banking will be changed dramatically and quickly in the near future.