20 April 2023

Bloomberg: Banks Betting on Paris Say There Really Is Life After London

For decades London was the main nexus of European finance, melding continental money with transatlantic ideas of what to do with it. But two years after Brexit became a reality, there’s been a clear shift across the Channel.

The spoils are being shared by European Union cities, creating a more fragmented landscape. It’s one where banking of various stripes gets done in Paris, shares trade in the Netherlands, and corporate lawyers and accountants pore over the details in Frankfurt. Dublin, Milan, Madrid and Warsaw are playing important supporting roles.

But if any city can make claim to being the bloc’s new pre-eminent hub, it’s Paris.

The city’s allure may have been tarnished this year by protests against President Emmanuel Macron’s plans to raise the retirement age, which led to nationwide strikes and images of burning garbage in the streets. But the numbers working at the offices of Wall Street titans point to a new European banking reality, one that won’t easily shift back after a mammoth relocation of money and brains.

JPMorgan Chase & Co. has about 550 markets staff including sales people and traders in the city now, a 22-fold increase on 2019. Bank of America Corp.’s headcount — at 600 — is six times higher than before the 2016 Brexit vote. Citigroup Inc. is building a new trading floor around the corner from the Avenue des Champs-Élysées.

Morgan Stanley is also adding staff in Paris and creating a new research center to support trading. And the global markets team at Goldman Sachs Group Inc. has more than doubled in the last two years, and the bank sees those numbers increasing further. 

“Paris is now our largest trading hub in the EU,” Marc d’Andlau, one of Goldman’s co-heads in France, said in an interview. “Back in the day, if you didn’t sit in New York, London or Hong Kong you could feel remote. That’s not the case anymore.”

London is still vastly bigger in terms of staff numbers, assets and volumes of business, but the UK’s departure from the EU is eroding its status. The city has effectively given up its mantle as the default location for companies to tap global pools of capital via stock and bond markets.

© Bloomberg