Amidst the fight to attract as many banking companies as possible outside of Britain following Brexit, a Frankfurt lobby group is of the view that as a consequence of Brexit, Frankfurt expects up to 10,000 financial industry workers to relocate from Britain to Germany’s banking capital.
“We’re going to benefit most,” Hubertus Vath, managing director at Frankfurt Main Finance, told reporters in London.
“Within the eurozone you need to be in Frankfurt to service the area,” he added.
There has begun a scramble among a number of European cities outside of Britain to attract and help London based financial companies to set up business, and with countries on the continent scrambling to attract top financial officials, there are several U.K. based banks that are reported to be are poised to announce that at least part of their business operations are being moved from London to another European city.
This is being contemplated because they fear that the U.K. might loose passporting rights, the right of free movement of employees within the European Union, which would severely impact the ability of such firms to serve clients and customers outside of the U.K.
In such a scenario many when financial institutions are still unsure about the future course of action and as the U.K. begins its withdrawal from the European Union (EU), city lenders are attempting to maintain their services throughout the bloc.
As the British parliament cleared its first legislative hurdle, the U.K. took a step closer to beginning formal negotiations with the bloc, even though Brexit negotiations have not yet started. On Wednesday this week, starting of the formal two year negotiation process with the EU was overwhelming voted in favor by the U.K. parliament.
In order to meet the British Prime Minister Theresa May’s self-imposed April deadline, the passing the vote could set the stage to complete the legislative process by March 7 which in turn would help in keeping the April deadline.
Given that Angela Merkel’s financial powerhouse can boast somewhat of a financial hub given its significant euro flows and the presence of the European Central Bank, it has been touted as a potential relocation hotspot for London’s bankers.
However, Frankfurt must compete with several other European cities and has a relatively unexciting reputation and is reasonably small in size. While even still smaller cities like Amsterdam, Dublin and Luxembourg are also vying to lure insurers and fund managers throughout Brexit negotiations, for Frankfurt, the French capital city Paris is a key competitor.
According to the latest research by the European Banking Authority, the U.K. reportedly has over 80 percent of the continent’s “high earning” financial professionals.
According to the new research, earnings of over 1 million euros ($1.07 million) in 2015, Britain boasts 4,133 of the 5,124 bankers, fund managers and compliance professionals across the EU who helpe din making that earning. Although it has announced it would leave its office post-Brexit, the European Banking Authority is also based in London.
(Adapted from CNBC)
Categories: Economy & Finance