City insiders have warned that the 50 percent tax levied on bankers’ bonuses is likely to lead to an exodus of talent from London. JP Morgan is said to be one of the banks forced to reconsider whether to maintain a significant London presence in the aftermath of the banking crisis and increasing regulation.
The decision includes second thoughts about JP Morgan’s new £1.5 billion London headquarters, which is set to provide office space for 20,000 staff. The bank have an option to pull out of the project by the end of 2010.
The tax, which applies to all bonuses above £25,000, has been criticised on the grounds that it affects the strongest and most reliable banks, such as JP Morgan and HSBC, as well as the weaker ones that have been blamed for causing the financial crisis.