Banks were hit hard Friday after the U.K. chose to leave the European Union, with U.S. banks falling sharply when the market opened, including a 4 percent drop for JPMorgan Chase and a 8 percent decline for Morgan Stanley.
Shock and uncertainty were a drag on all markets, of course. But the banking sector faces specific headwinds that could hurt their bottom lines. For starters, analysts say the U.K.'s move out of the EU will force many banks to eliminate and relocate thousands of jobs to meet new regulations.
For example, JPMorgan CEO Jamie Dimon issued a statement after the vote maintaining the bank's commitment to its London operations, but adding it may need to make staffing changes to accommodate the Brexit and the change to the EU regulatory landscape that accompanies it. While banks are not making clear their immediate staffing plans, analysts say that relocating executives to other EU cities will be a yearslong project for banks, one for which some firms have sought a head start.
"The last 12 months, it has been difficult to find a seat on a plane between Dublin and London," said David Montgomery, head of the risk and regulatory advisory practice at advisory firm EisnerAmper's office in Ireland.