PARIS (Reuters) - Paris is now neck-and-neck with Frankfurt in the race to lure jobs from the City of London financial district ahead of Britain’s exit from the European Union, a senior French financial sector official said on Thursday.
The German financial capital was seen as leading the pack since Britain’s 2016 vote to leave the bloc in March next year, triggering contingency planning by banks, insurers and asset managers in London who need an EU base after Brexit.
Banks have been applying for licenses in Frankfurt, home of their supervisor, the European Central Bank, the euro zone’s single most powerful institution.
But Arnaud de Bresson, chief executive of Paris Europlace, which promotes the French capital as a destination for financial businesses, says that Paris has now caught up with its German rival.
“Paris, since last October, has seen stronger growth due to new announcements from financial firms,” de Bresson told Reuters.
“We are now at the same level as Frankfurt and more than other centers,” de Bresson said.
There has been no independent verification by a neutral third party of total job numbers in Brexit-related moves to Frankfurt or Paris.
Lobbyists and banking executives have also said that potential for a softer Brexit is discouraging immediate action, meaning that the two cities could receive a trickle rather than a wave of London bankers in 2018.
An expected transition period before Brexit, which will expire in 2020, could also give Paris the chance to catch up with Frankfurt, which had been the most popular among banks looking for an EU base.
Frankfurt’s chief promoter, Hubertus Vaeth, had expected up to 6,000 new arrivals in Germany’s financial capital this year in the event of a hard Brexit. Vaeth recently said he has now pared back that assessment to less than 1,000.
Initially, Deutsche Bank (DBKGn.DE) had signaled it could move up to 4,000 jobs from its large London operation to Frankfurt, but this has now been scaled back to a few hundred — initially at least.
The EU’s surprise decision to choose Paris as the new home for its EBA banking watchdog, currently based in London, was also a bonus for the city. The bloc’s securities watchdog ESMA is already located in Paris and the EU has proposed giving it more powers.
“We believe the big decisions are still in front of us. This figure is just a milestone in the road,” de Bresson said.
More significant “rebalancing”, or job moves from London to Paris, is in the pipeline, he added, citing an expected acceleration of demand for licenses with the market authorities but declining to name specific companies.
De Bresson sees the combination of Brexit and the “political revolution” of labor and tax reforms from business-friendly President Emmanuel Macron as helping to attract firms.
The City of London and bankers, meanwhile, have cautioned that talk of a “Brexodus” is wrong and that companies will only move what they are required to do so by continental regulators to obtain a license.
The Bank of England, which has said it was plausible that 10,000 financial jobs could move from Britain to the EU by Brexit Day, maintains that London is the banker for Europe.
De Bresson said that Paris is looking to replicate some of the services provided from London by focusing on attracting capital market operations such as private placements, commercial paper and corporate bond issuance as companies turn to markets rather than banks for funding.
Reporting by Huw Jones; Additional reporting by John O'Donnell; Editing by David Goodman