LONDON — Frankfurt is emerging as the preferred location for UK-based banks looking to relocate jobs to Europe post-Brexit, according to the Financial Times.
UBS, JPMorgan, Morgan Stanley, and Bank of America Merrill Lynch are all considering relocating roles to Frankfurt, according to the FT. Frankfurt lobbyist Hubertus Väth told the FT he believes the city is in “pole position” to win Brexit jobs and expects to lure 10,000 jobs.
Brexit is seen as an opportunity to lure business away from the UK as Britain is expected to lose its passporting rights. Passporting allows companies to sell goods and services across the EU from a UK base. As a result, many finance companies will likely have to set up a subsidiary in the EU to conduct certain activities.
The FT surveyed around 30 senior finance officials and executives and found Frankfurt the most common answer for where jobs may move as a result of Brexit. The paper quotes one unnamed senior banker as saying: “The Germans are so far ahead [that] the French can’t quite believe it.”
Frankfurt is home to Germany’s largest stock exchange and is already a financial hub. Goldman Sachs, for example, already has offices in the city. It is seen as a good place to relocate trading roles by banking executives.
Prime Minister Theresa May announced on Monday that she will trigger Article 50 on March 29, officially beginning the Brexit process and finance firms are expected to take a final decision on job relocations shortly.
However, London is still expected to remain a financial hub. In its response to a House of Lords reports on Brexit’s effect on financial services, the government wrote in a note published on Monday: “Over 75 per cent of the EU27 capital market business is conducted through the UK and the UK industry manages £1.2 trillion of pension and other assets on behalf of EU clients. The government, therefore, believes that an agreement that secures deep market access, on a reciprocal basis, is in both the EU and the UK’s interests.”
Frankfurt is not the only city vying to win finance business from Britain post-Brexit. Parisian and French officials have been aggressively courting companies over the last six months and one of the Vice-Presidents of the Paris Region is in fact in London on Tuesday as part of a lobbying trip. Parisian officials have said in the past that they too hope to attract 10,000 jobs.
Dublin, Amsterdam, and Zurich are also seen as contenders, while some believe that roles are more likely to leave the EU altogether and be relocated to New York or Singapore. The House of Lords finance committee concluded in its December report that “much of the business lost by the UK would be more likely to relocate to New York than to the EU.”
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