21 March 2017

フィナンシャルタイムズ紙：英国からの金融業者誘致レースでフランクフルトがリード

“Over long periods of time, activity moves to the centre of gravity, and the location of the European Central Bank in Frankfurt is an example of this,” says John McFarlane, chairman of Barclays and TheCityUK lobby group.

“The Germans are so far ahead [that] the French can’t quite believe it,” adds a senior banker involved in his institution’s planning.

The FT interviewees expect London to remain Europe’s pre-eminent financial centre. But as well as highlighting potential gains for Frankfurt, they say that Luxembourg could pick up jobs in asset management and insurance while Warsaw looks to benefit from another wave of outsourcing as banks move back-office jobs to low-cost jurisdictions.

Many also argue that, rather than moving UK activities elsewhere in Europe, banks may shift resources to the US to benefit from tax and regulatory changes promised by President Donald Trump — or, alternatively, to Hong Kong and Singapore to take advantage of economic growth in Asia.

The big players

• Frankfurt Pro: Could benefit from banks choosing to be close to the ECB Con: Lacks the flair of Paris 
• Paris Pro: Much the most aggressive campaign, offers cultural attractions Con: May struggle with France’s reputation for hostility towards finance
• Dublin Pro: Similar legal system to UK, also shares language and timezone Con: Lack of infrastructure and regulatory capacity

Even before Britain’s vote last year to leave the EU, some banks were shifting resources from Europe back to the more profitable US market. Richie Boucher, chief executive of Bank of Ireland, says: “As far as investment banking is concerned, the presumption that it is a competition between London and another European centre has a degree of naivety. It’ll be between London and New York.” [...]

Frankfurt out in front

Shared language and a large existing business in Germany make Frankfurt one of the favoured destinations of UBS, say people familiar with the Swiss bank’s decision-making process.

The German city has also made the shortlist for Morgan Stanley, JPMorgan and Bank of America Merrill Lynch, although people familiar with those banks’ plans say their operations are likely to be scattered across a number of EU countries. Goldman Sachs already has an operation in Frankfurt.

“We have had more than an indication from three of the big five US banks, as well as from one Swiss, one Japanese, one Korean and one Indian bank that they have either already decided in favour of Frankfurt or are in the process of doing so,” says Hubertus Väth, who is spearheading the city’s lobbying effort and who expects it to attract 10,000 financial jobs during the next five years. “I think we are in pole position.” [...]

Thomas Schäfer, the finance minister of Hessen, the German state in which Frankfurt is located, says the greater fragmentation of the industry across Europe could play to the EU’s advantage.

“If all the jobs went to one country, then the countries that weren’t benefiting wouldn’t see this as an important part of the Brexit negotiations,” he says. “But if lots of us profit, then there is a better chance of presenting a united front on this point and making sure we get a good deal from the UK.”

Dublin sets out its wares

Dublin had high hopes of tempting business from London as soon as the Brexit vote last year. The Irish capital already has a large European lending operation for Citi and a trading business for Credit Suisse, which is expected to move more trading jobs from London. Other institutions considering moving assets or activities to the city include BofA, Royal Bank of Scotland, Barclays and Morgan Stanley.

Ireland is also rapidly attracting more investment funds, with the value of funds administered in Dublin jumping from €500bn in 2003 to €3.8tn last September, making the city the third-largest centre for investment funds globally after the US and Luxembourg. But it is not yet attracting as much interest from the insurance industry as was anticipated last year, when its language, culture and legal system were seen as big draws for relocations from London.

Eoghan Murphy, the country’s junior finance minister, recently said Ireland had raised concerns with Brussels about “creeping regulatory arbitrage” as other cities were “being very aggressive in trying to win business”. Both Frankfurt and Dublin have weaknesses. German labour rules are often seen as rigid — although officials are considering changes to remove certain protections for high earners — while Dublin’s size means it lacks housing and regulatory capacity.

Full article on Financial Times (subscription required)

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