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Top German politician and banker back Frankfurt as post-Brexit hub

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Top German politician and banker back Frankfurt as post-Brexit hub

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By Tom Sims FRANKFURT (Reuters) – A senior German politician and the country’s top banker threw their weight on Wednesday behind making Frankfurt a post-Brexit banking hub in a rare show of public support for building up the city as a financial centre. Wolfgang Schaeuble, Germany’s finance minister and the most influential politician in government after Chancellor Angela Merkel, has shied away from backing Frankfurt since Britain’s vote to leave the European Union, mindful of animosity towards the financial sector at home. “Naturally there is no better place in continental Europe than Frankfurt” to take business from London, Schaeuble told a room full of leading German bankers via videolink from Berlin. In his most outspoken comments on the subject to date, Deutsche Bank Chief Executive John Cryan told the same bankers that only one European city had the structures in place to assume a large portion of business from London. “And that city is Frankfurt.” The comments from influential political and financial leaders in Europe’s largest economy are unusual because Germany has so far been more subtle in its campaign to lure business from London than rivals such as France and Ireland. Ever since World War Two, Germany has sought to avoid the impression it is trying to grab power in Europe by competing for institutions and influence. Britain’s planned departure from the EU has prompted banks and investors in London to examine other cities to keep a foothold in the bloc so they can sell products across the continent without extra costs or trade hurdles after Brexit. Frankfurt has emerged as the most popular centre with Morgan Stanley, JPMorgan and Citi among major banks saying they will expand operations there due to Brexit. “It’s not about a choice between Dublin, Paris or Frankfurt – it’s about a choice between New York, Singapore or Frankfurt,” said Deutsche Bank’s Cryan. He said Frankfurt’s supervisory authorities, law firms, consultancies and international airport all spoke in favour of the city. For years, Deutsche Bank sought quick and risky growth by reaching out from Frankfurt to London and New York. But it has recently retrenched following a series of scandals that cost it billions of euros in fines and settlements. Cryan has said Deutsche Bank would focus more on its German roots, and support of Frankfurt was part of that effort. “Brexit could become a large stimulus package for Frankfurt’s economy,” Cryan said. “All that is needed is the will of the city and the state … And I believe that will is there.” Pierre Gramegna, Luxembourg’s finance minister, acknowledged that Frankfurt was ahead of the pack in attracting bankers so far but said EU centres had to club together to support the finance sector. “It’s not an issue of taking business from London,” he said. “It is an issue of making sure that the remaining 27 European Union countries after Brexit can remain competitive with Asia and America.”

(Reporting by Tom Sims; editing by David Clarke)
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