LONDON — A number of banks will announce plans to move operations from London to continental Europe “within weeks” as part of Brexit contingency plans, according to the chief executive of a body which promotes Paris as a leading European financial hub.
Arnaud de Bresson, chief executive of Paris Europlace, told Business Insider: “A good number of international investment banks and asset managers will announce a rebalancing for most of the part of their activities related to European instruments [activities covered by European Union legislation] in the coming weeks.
De Bresson said that banks would move “most probably not to one [European financial] centre but a few, according to the strengths of each financial marketplace in the European Union,” adding that banks would likely be deterred from moving to Paris if an “extremist” candidate wins the French election in four weeks’ time.
Prime Minister Theresa May triggered Article 50 yesterday, kick-starting the two-year exit process before Britain formally leaves the EU.
The UK is widely expected to lose financial passporting rights after Brexit, which would represent a huge blow to its financial services industry. The EU’s passporting rules allow businesses to sell services across the union from anywhere within it and only require companies to be regulated in one country, rather than everywhere they operate.
Goldman Sachs last week confirmed its intention to move hundreds of staff from London to Paris as part of their post-Brexit contingency plans, while HSBC’s chief executive said in January that the bank could move up to 20% of its banking operation to Paris.
De Bresson said that Paris was a more attractive destination for trading and capital market activity than other financial centres which have been widely touted as a post-Brexit alternative to London — including Amsterdam and Frankfurt — because it has a more dynamic financial marketplace, and a more attractive regulatory framework.
He said Paris’s financial district had made “huge progress” in the last five years in terms of financial regulation.
“Five years ago, regulation in Paris was awful and absolutely not attractive. Since then, our regulators have commenced some fast-track procedures which are very attractive and also very international,” he said.
He said that Paris’ regulatory framework was considered to be “on the top level of international standards, which is not the case in Amsterdam or even Frankfurt.”
De Bresson stressed that the aim of his organisation was to work with the City of London, rather than against it, to promote Europe as a competitive financial marketplace.
He said: “Paris Europlace works with the City of London. We have a steering committee to consider common views on objectives for Europe as a whole, as a global capital marketplace. We are more than ready to continue our joint partnership with the City, and it is in our interest that we continue our joint work.”
“Our common interest is to continue to build a competitive European financial marketplace in a global world.”
More from Business Insider UK:
- The 10 things in advertising you need to know today
- People in the embattled House Intel chair’s California district are cutting him some slack amid Trump-Russia turmoil
- Theresa May accused of an ‘outrageous’ attempt to blackmail the EU over security
- Theresa May’s Great Repeal Bill is the biggest political power grab of modern times
- These historic black and white photos have been transformed into colour masterpieces by a 21-year-old Brazilian artist
Get the latest Goldman Sachs stock price here.