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Bankers on edge as global policymakers plot responses

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JPMorgan ( JPM ) has missed out on a couple of deals, Dimon says

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Formal restrictions against Wall Street could be costly

for EU

By Lananh Nguyen, Sinead Cruise

NEW YORK/LONDON, April 9 (Reuters) - Wall Street bosses

are girding for Europe to sideline American investment banks in

response to the tariff war unleashed by U.S. President Donald

Trump, fearing client boycotts and in a worst-case scenario,

even formal restrictions.

More than half a dozen senior bankers and advisers told

Reuters they are bracing for European Union governments and

companies to do more business with home lenders, which could

quickly dent their market share.

Two bank industry groups have discussed how Europe could act

to restrict U.S. banks' activities in the region, two people

said, and at least two major banks have also held internal talks

on the matter, according to two senior executives. All requested

anonymity because the discussions are private.

One such tool at the EU's disposal is the Anti-Coercion

Instrument (ACI), conceived in 2021 amid rising concerns at the

time about the weaponization of trade by the U.S. and China. The

ACI enables the bloc to place restrictions on foreign financial

services companies, limiting their access to EU markets.

Meanwhile, in a sign of possible anti-U.S. sentiment, French

President Emmanuel Macron called for European companies to

suspend planned investment in the United States following

Trump's sweeping tariffs.

JPMorgan ( JPM ) CEO Jamie Dimon, asked if he was seeing any

anti-American sentiment among clients in an interview with Fox

Business' "Mornings with Maria" on Wednesday, said:

"We've lost a couple of bond deals already...they simply say

that, you know, we'd rather just do this with a local bank than

with a U.S. bank."

EU countries on Wednesday approved the bloc's first

countermeasures against the United States, joining China and

Canada in retaliatory moves that could tip the world into

recession. Following those announcements, Trump said he would

temporarily lower new tariffs on many countries, even as he

raised them further on imports from China.

More measures could be on the way. EU Trade Commissioner

Maros Sefcovic said on Monday the EU was ready to consider all

retaliatory options. "We are prepared to use every tool to

protect (the) single market," he said.

Meanwhile, officials at the European Central Bank said they

were fully mobilized to ensure the euro zone economy remained

stable and well financed.

Disentangling U.S. banks from the European financial system

wouldn't be an easy task. While they account for only a very

small portion of the region's loans and deposits, Wall Street

firms dominate parts of securities trading, including

derivatives.

U.S. lenders have invested heavily in European businesses

since the 2008 financial crisis, and even more so after Brexit.

When Britain left the EU, Brussels demanded Wall Street banks

bolster their EU outposts with additional capital and local

staff, leading to thousands of jobs being created.

While the U.S. banks don't provide a geographical breakdown

of their earnings, they do provide a window into the size of the

business. For example, Germany, the United Kingdom and France

are JPMorgan's ( JPM ) first, second and fourth-largest country

exposures outside the U.S., respectively.

The U.S. firm earned the biggest share of investment banking

fees in the region during the first quarter of 2025, or about

$514 million for 8.2% share of the total fee pool, LSEG data

shows.

Still, Europe can draw on its experience overcoming the

complexities of Brexit, when it untangled a major partner from

the bloc, another person familiar with the matter said.

Restrictions on Wall Street firms could be partial, for example,

the person added.

ERODING ADVANTAGE

"The advantage of the U.S. banks is eroding," said a senior

financial executive, who declined to be identified discussing

the policies.

In securities trading, clients are debating whether they

should switch to European counterparties from U.S. banks,

another of the sources said, adding that this has never been

discussed before.

Recent dealmaking for the likes of Volkswagen and Porsche

have underscored the heavy influence of U.S. banks over their

European rivals, but some EU-based advisers said they were

already seeing greater numbers of local banks hired on deals.

Fear by U.S. firms that finance could become a weapon in the

trade war is also shared by allies in Europe, where allies worry

access to credit cards and the provision of dollars to their

banks could be curtailed.

Companies and banks are considering the tail risk that the

U.S. could pull U.S. dollar funding lines, in a move that could

put the European financial system in jeopardy, one of the people

said.

Reuters reported last month that some European officials are

questioning whether they can still rely on the U.S. Federal

Reserve to provide dollar funding in times of market stress.

"For Europeans, it's whether they would prefer national

champions," one of the people said. The world is nationalizing

and there are some political risks seen with U.S. banks."

European investment banks have smaller balance sheets and aren't

as deep pocketed as their U.S. peers.

"You see this undifferentiated anti-Americanism, but it just

doesn't hold for very long. These emotional moments will give

way to companies going back to their rational economic

interests," one of the financial executives added.

Samuel Gregg, political economist at the American Institute for

Economic Research, said placing restrictions on U.S. financial

services operating in the UK and the EU would be an act of

self-harm for Europe.

"It would be a huge leap for Europe to try and fill the

yawning gap that would ensue from placing restrictions on U.S.

financial services. The same restrictions would also add to the

damage upon European economies likely to flow from U.S. tariff

increases," Gregg said.