By focusing on quietly targeting specific sectors like clearing, fintech and high frequency trading, Amsterdam is taking a different approach from other European cities to lure London’s post-Brexit business.

“Within that financial sector, there are parts, niches, clusters that will move to Europe and for which Amsterdam is really good. I’m not working on getting all those big banks over here,” Kajsa Ollongren, the Dutch city’s deputy mayor in charge of economic affairs, said during an interview at her office last week.

Open overtures to flaunt other cities to The City have been made by European capitals and business interests since the Brexit vote. While a truck carrying a billboard saying: “Dear start-ups, Keep calm and move to Berlin” was spotted in London, Paris sent four thousand British executives a love letter explaining why they should come to the French capital. An advertising drive that promotes its English-language prowess is being planned by Dublin.

Ollongren said that’s not Amsterdam’s style. Instead, she plans to woo them with facts and figures and added staff at the city’s unit to attract businesses from abroad while focusing on personally lobbying financial institutions in the U.K. The Dutch capital’s location provides a gateway to the rest of Europe and its digital connectivity attract a high-quality European talent pool, is the main selling point of Amsterdam in her view.

As she’s not convinced London’s banking business as a whole will pack up and leave the city, Ollongren is focusing on winning only certain businesses. As the European Central Bank has had its eye on requiring euro trades be cleared in the euro area, clearing has been cited as one of the likeliest businesses to do so. However before the Brexit vote, European Union’s top court ruled against it.

A lot of money is at stake even with clearinghouses alone. Dwarfing the $19.6 billion that change hands in the Netherlands, $928 billion in the U.K. for euro-denominated derivative trades is the value of the business on which traders rely to guarantee they get the price agreed at execution.

According to Ollongren the finance culture of the country is also suitable for the profile of the type of people who work in the industry. By instituting caps on banker bonuses of no more than 20 percent of fixed salaries and making employees take an oath to uphold confidence in the industry, the Netherlands has been particularly tough on fighting excesses in the banking sector by Dutch nationals since the global financial crisis.

Ollongren said that the people who work in clearing are, “very solid, very reliable, very important. We’re good at that. I think it would be fantastic” and “are not the guys with the large bonuses and the fast cars”.

It could still take years for the U.K. and the EU to negotiate the split and any relocation isn’t likely to happen any time soon as the U.K. has yet to invoke article 50 which would start the process of exiting the EU.

Promotion of Amsterdam’s digital connectivity is also being focused by Bottom of Form

Ollongren. Fintech companies focusing on bitcoin and blockchain technology and high frequency trading would be a nice fit in Amsterdam due to its digital prowess, she said.

However Arnoud Boot professor of corporate finance and financial markets at the University of Amsterdam said that the unreliable environment will impact on Amsterdam’s attractiveness for financials.

“In general, our government is predictable, regulation is relatively transparent, the accessibility is great and language is not a problem,” Boot said. But an indication of the “negative political sentiment. And that sentiment confirms an unreliable environment” for the industry is the attitude toward bonuses, Boot added.

“It’s not about Amsterdam, not about the urban conglomeration it’s not about the Netherlands. It’s about Europe. People, companies who come to Amsterdam think about a European market. That’s the Dutch and the Amsterdam mentality. It’s always at a European level. The gateway to Europe,” Ollongren said.

(Adapted from Bloomberg)

Categories: Economy & Finance, Strategy