Frankfurt clinches nearly 20 banks as competition ramps up for 60 remaining firms
Tarek Al-Wazir, economy minister for the German state of Hesse, is confident of Frankfurt’s position.
Nearly 20 banks have committed to Frankfurt since the Brexit vote, according to top German officials, with rival cities still vying for the 60 remaining firms yet to decide on a new EU hub.
Tarek Al-Wazir, economy minister for the German state of Hesse, where Frankfurt is situated, said the city had managed to attract top tier banks and was confident that the next wave of decisions would come out in Frankfurt’s favour.
“We’ve got 18 entities … that have committed,” he told the Press Association during his most recent trip to London.
“There will be other entities who are in the decision process now, so we’re in contact with some of them – of course, we’re not able to say who they are, but at the end if you compare everything that happened since the Brexit referendum and if you compare the real decisions made, I think we are number one on the continent and I’m sure this will continue.”
Hubertus Vath, managing director of city lobby group Frankfurt Main Finance – who was accompanying the minister on his trip – said that while big banks like JP Morgan and Goldman Sachs have already made their location decisions, there were a swathe of firms yet to launch Brexit contingency plans.
“We did some research in the beginning showing that 100 institutions will have to make up their minds.
“We know as of today that just about 40 have made their decisions public and there are a few who are just about to make their decisions … So there is still 60 up for grabs, however we’re talking significantly smaller entities.”
Those smaller entities would include prime brokerages and corporate treasury centres (CPCs), which serve as the in-house banks of multinational corporations, providing treasury services for its group companies.
While the remaining firms may not be headline grabbing, Mr Al-Wazir said there was still a healthy rivalry at play.
“The competition is still there and maybe the competition is even increasing, but at the end the outcome is good for us.”
The minister admitted he was “a little bit disappointed” that Paris was chosen as the new location of the London-based European Banking Authority, but said any competitive edge it might give to Paris was limited.
“The ECB (European Central Bank) is far more relevant,” he said.
I always said that if German labour law was that bad Germany wouldn’t have reached the position that it has reached. Hesse Economy Minister Tarek Al Wazir
Mr Al Wazir – whose London visit was his fifth since the Brexit vote – said financial firms would also be interested in new local labour reforms.
“I always said that if German labour law was that bad, Germany wouldn’t have reached the position that it has reached. But you know, especially concerning banks and financial institutions, the federal level is now on its way to changing the labour law.”
The minister pointed to a recent coalition agreement which will make it easier to fire and replace high-earning bankers – a boon for those who previously bemoaned stringent legislation that made it hard to sack senior staff.
He said the next step was to have more firms make the trip to Frankfurt themselves.
“We have many people visiting us, because at the end if you’re opening something, it won’t help you if we are always here (in London), you have to see it yourself.
“So I think our main work is to welcome people and to show them around, get them to know the right people.”