The plans are part of emergency measures drawn up by the Wall Street bank to ensure it can continue trading if Europe’s biggest economy loses power this winter, following Vladimir Putin’s decision to cut Russian gas supplies on the continent. Russian gas flows through the Nord Stream 1 pipeline remained at zero on Tuesday, with Putin saying they would only resume if Western sanctions – imposed over his ongoing invasion of Ukraine – are lifted. The pipeline has historically delivered about a third of the natural gas exported from Russia to Europe, but was operating at only 20% of capacity before last week’s outage. JP Morgan was one of several financial institutions to move assets out of the UK following the country’s decision to leave the European Union. JP Morgan has plans to move work from Germany to the UK amid fears of power outages, years after it moved billions of dollars worth of assets from London to Frankfurt over Brexit. Photo: JP Morgan offices are seen in London (file photo) In September 2020, the US bank announced that it was moving around €200bn (about £211bn at the time) from the UK to Germany. It also greatly expanded its operations in Paris. This followed similar moves by other major banks in Britain, such as Barclays, which moved nearly €200 billion in assets to Dublin. But JP Morgan is considering bringing some of its business back to the City of London as it works to protect itself from potential fallout from the current chaos in European markets, where sharp rises in the price of energy after the Russian invasion have put pressure on households and drove the rate of increase in consumer prices to new highs. Inflation in the Eurozone reached 9.1% in August, a record in the history of the single currency and well above the two percent interest rate targeted by the ECB. Meanwhile, on Monday, the euro fell to a 20-year low against the dollar, falling below $0.99 as fears of a recession in the eurozone grew. Today, Germany’s DAX rose 0.7% – only after slipping more than 2% lower on Monday. According to The Telegraph, sources said JP Morgan is currently wargaming options to allow it to continue trading if Germany plunges into darkness in the winter. A source told the newspaper: “Labor transfers could also be made to and from any location, not just involving the UK.” Another option the bank could pursue would be to fire up its diesel generators at its Frankfurt offices, which would keep them running for days in case they lose power from the grid. Another option is to tell employees to work from home to reduce the company’s energy consumption, the Telegraph reported. The source told the publication that the bank currently has no intention of implementing these measures yet. “It would take a perfect storm of a complete shutdown of Russian gas supplies, no reduction in gas usage and little alternative gas supply before it would have a real impact on our business,” they said. MailOnline has sought comment from JP Morgan in relation to the reports. JP Morgan is considering returning some of its operations to the City of London as it works to protect itself from the current chaos in European markets The news that JP Morgan was drawing up its contingency plans came after German prosecutors raided its offices late last month as part of evidence of the multi-billion dollar “cum-ex” tax evasion scandal. The share-trading scandal that has plagued German political and financial circles for several years has cost taxpayers billions of euros, lawmakers say. A large number of banks have been investigated by prosecutors investigating possible wrongdoing, with raids on the German branches of Barclays, Bank of America and Morgan Stanley in recent months. Government officials say the investigation involves about 100 banks on four continents and at least 1,000 suspects. “We can confirm that our offices in Frankfurt were visited this week. We continue to cooperate with German authorities in their ongoing investigation,” a JPMorgan spokesman told Reuters in an emailed statement. Meanwhile, the German government on Sunday unveiled a new multibillion-euro plan to help households cope with rising prices and said it was looking to a windfall from energy companies to help fund the aid. German businesses and consumers are feeling the pain of skyrocketing energy prices as Europe’s biggest economy tries to wean itself off dependence on Russian supplies in the wake of Moscow’s invasion of Ukraine. Quick measures to prepare for the coming cold season will ensure Germany “gets through this winter,” Chancellor Olaf Solz said as he unveiled the €65 billion package. The German government on Sunday unveiled a new multibillion-euro plan to help households cope with rising prices and said it was eyeing a windfall from energy companies to help fund the aid. Pictured: Cooling towers are seen in Germany, September 2 The latest deal, which brings total relief to nearly 100 billion euros since the start of the war in Ukraine, was signed on Sunday night by Germany’s tripartite governing coalition of Scholz’s Social Democrats, the Greens and the liberal FDP. Among the key measures are lump sum payments to millions of vulnerable pensioners and a plan to strip energy companies of windfall profits. The government’s latest aid package came two days after Russian energy giant Gazprom said it would not restart natural gas deliveries through the Nord Stream 1 pipeline on Saturday as planned after three days of maintenance. Ukrainian President Volodymyr Zelensky said late Sunday that his country had foreseen the energy complications. “Ukraine has repeatedly warned Europe that maintaining Nord Stream ties with Russia would be a problem that could turn into disaster at any time. That’s exactly what happened,” he said. Scholz said the German government had taken “timely decisions” to avoid a winter crisis, including filling natural gas stores and restarting coal-fired power plants. However, precautionary measures, including the effort to reduce consumption, have not contributed to the sharp rise in household bills. The latest announcement follows two previous relief packages totaling €30bn, which included a cut in petrol tax and a popular heavily subsidized public transport ticket. But with many of those measures expiring at the end of August and consumer prices still on the rise, the government is under pressure to provide fresh support. Quick measures to prepare for the coming cold season will ensure Germany “gets through this winter”, Chancellor Olaf Solz (left) said as he unveiled the 65 billion euro package. Meanwhile, French President Emmanuel Macron has called for a sharp 10% reduction in the country’s energy use in the coming weeks and months to avoid the risk of cuts. Inflation rose again to 7.9% in August, after falling for two straight months thanks to previous government relief measures. Scholz said, however, that not everyone is suffering from high consumer prices. Some energy companies that might not use gas to generate electricity could “simply use the fact that the high price of natural gas sets the price of electricity and therefore make a lot of money,” he said. “Therefore, we decided to change the organization of the market in such a way that these windfall profits no longer arise or disappear.” Cutting the windfall would create “financial headroom that should be used specifically to ease the burden on consumers in Europe,” the government said in its policy paper. The move could potentially bring “double-digit billions” of euros in relief, Finance Minister Christian Lindner estimated at the news conference. The government said it would seek to implement the measure first through a reform of the European energy market, before going it alone. Energy companies were making “crazy amounts of money” under the current system, Economy Minister Robert Hambeck said in a statement. Reiterating his mantra that Germans will “never walk alone” in the energy crisis, the chancellor unveiled a series of measures, including a one-off payment of 300 euros to millions of pensioners to help them cover rising electricity bills. The government will similarly target students with a smaller one-off transfer of €200 and payment of heating costs for people on housing benefit. Berlin has also earmarked 1.5 billion euros for work on the successor to the hugely popular nine-euro monthly ticket on local and regional transport networks. The relief package as a whole should be financed with no further debt planned, Lindner said. “These measures are included in the government’s existing fiscal plans,” covering 2022 and 2023, he said, with the rest covered by the energy windfall measures. Brussels said on Monday it would prepare “emergency” action to reform the electricity market and bring prices under control. Meanwhile, French President Emmanuel Macron has called for a sharp 10% cut in the country’s energy consumption in the coming weeks and months to avoid the risk of redundancies and cuts this winter.
