By Huw Jones
LONDON European financial centres are stepping up a charm offensive, saying they expect banks to start moving some operations from London next year to ensure continued access to the EU market after Britain leaves the bloc.Frankfurt, Paris, Luxembourg and Dublin are among the centres hoping to attract banks and other institutions from London, Europe's biggest financial centre. Hubertus Vaeth, chief executive of Frankfurt Main Finance, which promotes Frankfurt as a financial centre, said the aim was not to inflict "as much damage as we can" on the City of London, but to siphon off some of Britain's "entrepreneurial spirit"."We already see small teams, explorative teams looking into certain aspects," Vaeth told Reuters on the sidelines of a conference in London on Monday on how Brexit will affect investment. "We see options for real estate, and we have very, very clear indications that things will be moved, however, not entire operations," he said. "We expect them in the second half of next year. The big moves will start in the second half of 2017."Britain has said it will open formal divorce talks with the European Union by the end of March, but banks say they are already starting to look at relocating some staff and operations in case future access to the EU market turns out to be restricted, a scenario known as a hard Brexit."We can only plan on the basis of a hard Brexit," said Ronald Kent, a managing director at the British Bankers' Association (BBA) said.BBA members say some business could move to continental Europe or New York, or stay in Britain, Kent said, reflecting comments made by U.S. banks and the Bank of England last week.
THOUSANDS TO PARIS
Arnaud de Bresson, chief executive of Paris Europlace, the French financial district, said banks have told him there are only two choices when it comes to relocating operations from London - France or Germany."Our estimate is that close to 10,000 people involved in the financial sector could move from London to Paris in the next few years, and Paris is getting fully organised for that," de Bresson said.Paris's financial district has launched an advertising campaign in London with the slogan "Tired of the fog? Try the Frogs! Choose Paris La Defense", referring to the Parisian business district.
Brexit was "bad news" for Europe in terms of global financial market competitiveness, but Paris was working hard to make itself more attractive by cutting taxes for foreigners working in finance, de Bresson said.He was also in talks with political parties ahead of French presidential elections next year on follow-up reforms to make Paris attractive to bankers."We will continue to push vigorously for new tax and social improvements for companies," de Bresson said.Vaeth said London still has a major role in finance and there was a need to avoid disruption to the industry.
"We believe that Europe needs a global financial centre... but we feel uniquely positioned. We want to do it in a way that is constructive, to build a new London bridge into the euro zone," Vaeth said.Mark Boleat, head of policy at the City of London Corporation, which runs the British capital's "Square Mile" financial district, said financial firms might need to establish a reasonably sized presence on the continent. "Applications for licences are being made, property options being looked at, but the big pressing of the button, that is going to come a long way down the line," Boleat said."A regulator will want to ensure that the thinking people are there. It's not good just having a few people in Paris. It will require a separate board, senior staff," he said.Rupert Peters, a senior account manager at Britain's trade and investment ministry, said Frankfurt lacked both the liquidity of Britain's financial markets and its cluster of support services.Bankers in London have also sometimes complained that Frankfurt would be boring after life in the British capital."I am sometimes struck by the fact that Frankfurt is portrayed in the media as something between a cemetery and a backward country. I am getting irritated by that," Vaeth said. (Reporting by Huw Jones; Editing by Carolyn Cohn and Susan Fenton)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Oct 17, 2016 23:30 PM