Late Lunchtime Links: Goldman Sachs is spending £1bn on a new London office, but may still retreat from Europe

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When it comes to making a visible monetary commitment to a particular market, you don't get much more conspicuous than Goldman's decision to develop a massive new European banking HQ in London's Farringdon. Costing an alleged £1bn, the new office was being seen as a sign that Goldman was committed to Europe no matter what - until last week.

On Thursday, Gary Cohn, the Goldman president and COO who's been mooted as a replacement for Goldman CEO Lloyd Blankfein - stood up and suggested that Goldman's commitment to Europe isn't quite as unequivocal as everyone had thought.  European regulations like the bonus cap may make it difficult for Goldman to attract staff in London, said Cohn.  "We have to be thinking about moving. If we cannot attract the best people that is a big hindrance to our business," he said. Similarly, he said the financial transaction tax may make encourage Goldman to move trading desks overseas.

There won't be any big changes in the short term: Goldman is waiting to see how the new European regulations play out.  "You can't have a new trading desk show up overnight and that takes many months, if not years, of planning," Cohn declared. Long term however, there's a danger that Goldman's new building may end up as a relic to London's financial pre-eminence. If the worst comes to the worst, it could always be sublet to the creative industries.


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"I had a Managing Director tell me years ago, when I was a mere pup, wet behind the ears, that the best strategy to succeed in investment banking was to keep your seat. Success would come, and success would go, but you could never enjoy the fruits of good luck or a heated market if you weren’t in a position where you could get paid." (Epicurean Dealmaker)  

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