More London banks are expected to choose Frankfurt for their European headquarters after Brexit. Since April, is expected the banks to start moving to the city. German financial regulator BaFin is currently processing over 10 applications for German bank licenses. About 100 banks are expected to move some of their London business after the UK leaves the EU.
Leaving the Community would most likely mean a loss of so-called “passport rights” that allow financial institutions to sell their services in the other 27 member states without restrictions. This means that banks will have to move to the continent to continue doing business.
So far, however, only about 40 banks have officially announced their plans.
Based on the information so far, Frankfurt could gain about 5,000 jobs from the US and Japanese banks expected to move their operations there. This places the city in a leading position in competition with rivals of the continent like Paris, Amsterdam, Dublin and Milan.
The German politicians and bankers have been affected by the EU’s decision to move the European Banking Authority from London to Paris rather than Frankfurt, where is located the European Central Bank. Paris has received a serious boost, but Frankfurt remains a preferred financial center.
Meanwhile, the Association of German Banks (BdB) has urged Europe to make the most of its efforts to avoid the Hard Brexit without a trade agreement.
The negotiators from both sides David Davis and Michel Barnier announced on March 19th that the UK would go through a “transitional period” of almost two years after the Brexit date – March 29, 2019, during which the country will enjoy all the benefits and will comply with all the rules of the common market and the customs union.
The German Banking Association also welcomed the reelection of Angela Merkel, and the new German government, according to the organization, has committed itself to making Germany and Frankfurt more attractive to the financial world.