Comments by people in the English banking ecosystem: France is completely delusional about being able to attract English financial ecosystem. They are only hesitating between Amsterdam and Frankfurt.
Source: an ex that is currently processing staffing numbers across EMEA for a major international investment bank.
Frankfurt is too small to subsume most of this business because of a difficulty getting staff that is willing to work there, and Amsterdam has a different focus. Likely they'll all get part of the pie, but that some of it goes to Paris is pretty much guaranteed.
But most major banks have desks both in Frankfurt and Paris already, not just to handle local business but because it's hard enough getting top people to London (my ex even regularly tells me of her frustrations of dealing with offices in certain countries that exists solely because a single hotshot trader prefers a certain city over one of their big centres and brings in enough business for it to be worth a whole support staff to keep them happy) and so most of these banks needs presences in lots of places to be attractive.
If you don't have a presence in Paris and your competitor does, you're going to lose a sufficient portion of high-value traders to competitors over it for it to be an issue.
Frankfurt is no London and no Paris, this is clear. However, that's also related to the way in which Germany as a whole functions. The individual cities aren't all that big, but they are clustered in metropolitan areas.
If you live in the vicinity of Frankfurt, you can just drive to Heidelberg for a Saturday night out (about an hour). Or, if you're more interested in food, theater or classical music, you have a large selection from Mainz to Aschaffenburg, all of which is easily reachable from Frankfurt.
Equally, the pool of support staff you can draw from isn't recruited from the minuscule population of Frankfurt (700k), but from the whole metro region (5.5 million). I myself live at the outermost boundary of the metro region and know many people who commute to Frankfurt.
The second point is that the relatively small size of the city of Frankfurt is an asset in one critical regard: Frankfurt is first and foremost a banking city (and secondly an airport city). If banks want to exert some influence over policy there, they have all the leverage they could want. This is not the case in Paris.
Personally, I'd be surprised if there was anything other than a somewhat even split of relocations between Frankfurt and Paris. And I'm fairly certain that the TGV service between Frankfurt and Paris will also be extended beyond what exists today.
One big advantage of Frankfurt is that Germans are much more open to speaking English than the French, and this is an advantage that should not be underestimated. If you don't speak German, but do speak English it's possible to live in Frankfurt. To live in Paris, you have to speak French.
Only Amsterdam (which has English as its official language next to Dutch) is better in that regard. In Amsterdam you don't even have to ask if someone speaks English (that's considered an insult, on the same level of asking someone whether they can read and write).
I also have had first hand experience of staff at establishments in Paris simply refusing to speak English. All in all if I had to choose as a Londoner I would prefer to move to Frankfurt or Amsterdam over Paris any day of the week.
I speak French, but not that well. First time I went to Paris ('94) it was indeed close to what you suggest, but my French-teacher was right about one thing: As long as you got the pronunciation right and tried people would fall over themselves to try to help you.
Last times I've been in Paris, on the other hand, people would impatiently interrupt me when I tried to practice my French, and switch to English. It was outright annoying, as it made it hard to improve.
The most inconvenienced I've ever been was in some little village in Provence a couple of decades ago, when a shopkeeper didn't understand my French. But he proceeded to stop random passers-by until he found one that was willing and able to translate.
That's the same everywhere. London is a cluster. My suburb of London itself has about a dozen town centres.
> Frankfurt is first and foremost a banking city (and secondly an airport city)
That's great for employers, awful for employees.
> If you live in the vicinity of Frankfurt, you can just drive to Heidelberg for a Saturday night out (about an hour)
Driving for an hour is not attractive for going out whe working long hours. This is why you see bankers paying millions of pounds for small flats in London Docklands so they are close to both work and nightlife. People who are used to walking distance or a few minutes on the underground to get to work and the same to get to restaurants and nightclubs are not going to be impressed by an hour to get someone interesting.
> Equally, the pool of support staff you can draw from isn't recruited from the minuscule population of Frankfurt (700k), but from the whole metro region (5.5 million).
Nobody cares about the support staff. They're easy to hire and cheap. The banks cares about the traders they pay a million plus in base salary and similar levels in bonuses. If they are willing to move to Frankfurt, the banks will go there. If they say "no, I'll just go to bank Y instead - they have an office in Paris," the banks will go to Paris.
As I've mentioned elsewhere, the bank my ex works for maintains several offices because of individual traders that insist on living in specific places and who bring enough business to justify it.
> If banks want to exert some influence over policy there, they have all the leverage they could want. This is not the case in Paris.
Banks have plenty of leverage in London, which is much larger than both Paris and Frankfurt combined. If anything they will have more leverage in Paris because Frankfurt is real competition for Paris in a way neither Paris or Frankfurt has been for London.
But generally, Frankfurt is perceived very well. Less hostile towards non-French speakers than Paris (subjectively), less remote than Dublin. It's a very small city, but you're quickly in Munich/Berlin/Cologne, which helps.
that's objective, germans generally are more keen to speak with foreigners in english than french, no matter their level
It differs, in generally people either speak it there, and then do so reasonably, or they absolutely don't speak it, not a single word.
This is quite different in The Netherlands. In Amsterdam people in shops etc will often address you in English and are rather fluent, but even in the most remote villages of the Dutch countryside everyone speaks some amount of English. It may be with a very heavy accent and not fluent at all, but generally it's enough to at least have a basic conversation.
If I recall correctly, I believe Faroese might be the closest (depending on how you classify Scots).
One the closest indeed, although Frisian is technically even closer. If I'm not mistaken it's really quite close to old English, but a modern English speaker wouldn't be able to understand it at all ;)
That's important. The French tend to be happy to accommodate, but there's something about making it clear that communication is a mutual effort. If you try in French first, it indicates that you want to work with them rather than assuming that they should kowtow to your preferences.
At least in private equity and the related leveraged loan, structured product and similar work, New York is taking the lion's share of formerly British bankers' business.
Frankfurt and Amsterdam are nice cities, but why wouldn't talent prefer first-tier ones? Why not go to NYC, Singapore or HK?
Why not go to NYC, Singapore or HK?
For this very reason Zurich (which is arguably the center of private banking) is out of the race. Switzerland is not an EU country.
It's a failing strategy, long term. Can the EU "attract" employers by making it illegal for them to sell without physically being there? Sure, but that's kind of the opposite of trade.
Note that the EU has already tried to force this business out of the UK even before Brexit. The UK Government took the Commission to court and pointed out that their new regulations blatantly violated the EU's own commitments around discrimination, and won.
http://www.wsj.com/articles/u-k-wins-court-case-with-ecb-on-...
The EU is no friend of the UK, or bankers. They see finance workers as resources to be fought over and pumped for tax revenue, nothing more.
Ultimately, if a branch of a company isn't in a jurisdiction which follows EU/US/Japanese law it can't expect to represent itself as a EU/US/Japanese branch and expect to do the same paperwork as an EU/US/Japanese branch. The innovation with passporting was entirely around assuming that your French or Estonian branch didn't need to do special Italian paperwork or set up an Italian subsidiary because they all sat under the same jurisdiction following the same regulations anyway. If you insist companies based on your territory should be free to not comply with EU regulations, you can't expect that same rule to continue applying
http://www.cnbc.com/2016/07/07/theres-a-little-known-eu-rule...
So your statement that such companies "can't expect" is wrong - in fact they can expect that, because the EU already committed to it.
This is posing a big problem for the EU right now because obviously on the day of exit the UK would still have an "equivalent" regime, so there'd be no grounds to force bankers to relocate. The details of MiFiD II were handled by technocrats whose brief was just to make trade easier, so such rules make sense: if the two regimes are close enough, why insist on EU membership?
Nobody realistically expects the EU to stick to their own rules though. The EU never lets written law trump political demands. Just look at the Euro bailouts if you doubt that.
Banks operating in both countries can of course gradually shift more work towards the NYC office, but I don't think that many companies are looking to relocate whole departments there.
That's not what's happening. The top performers are moved, middle- and low-level staff in London released and new staff hired in New York. A handful of middle managers may be moved or hired in Paris or Frankfurt or Amsterdam, as a conduit, too.
Clients are also shifting. The amount of first-time business I am personally seeing from new European clients, who need a considerable amount of help adapting to New York's more direct banking culture, has us hiring frenetically (though locally).
I don't doubt that NYC will profit from Brexit, but I think it's more in an indirect way (as you describe) and the generally better economic environment in the US at the moment, not through relocation.
As a side note, some banks use the Brexit discussion to move back office functions to Eastern Europe, hoping that they can sell it as a Brexit consequence and not as offshoring.
well, that would be conditional on Brexit, right?
And while it's a natural move by an American bank to move jobs to the US, it's much less clear for the rest of the sector.
Most London-based PE houses have offices in other European capitals (Paris, Milan, Munich, Madrid, Stockholm, etc). Just take a look at KKR, Cinven, PAI Partners, CVC, Apax, Carlyle, etc, offices location around Europe.
Additionaly, most active banks have lev fin / acquisition finance teams in other European cities other than London (e.g. SocGen in Paris, BNP Paribas in Paris, DB in Frankfurt, Unicredit in Milan, Santander in Madrid, BBVA in Madrid, etc).
Should London be worried? Yes. Is the threat coming from the US? No.
I thought the entire point of moving was to benefit from EU passporting - so moving from London to NY, even post-Brexit, would not help with that.
The EU is supposedly a union of equals. In reality it isn't. It's run by and for the benefit of the original founding countries, in particular, for France and Germany. That's why the UK leaving is not seen as a threat to the EU's existence but France leaving is, even though in many metrics they're comparable countries.
Of course Amsterdam has the same issue. The country's politics are in some ways more volatile than the UK. The most popular politician there strongly dislikes, maybe even hates, the EU. Whenever this comes up I tend to see Dutch people online saying things like "well it could never happen here because" followed by some explanation of how European moral superiority ensures that even if anti-EU candidates come first in elections nothing will ever change, as everyone else will unite in opposition, which isn't very convincing to put it mildly.
Also bear in mind that we're talking about the eurozone here. Some countries have populations flirting with the idea of exiting the euro but not the EU. I suspect if one tries it they will discover they are fully under the control of the EU and are simply told that their votes will be ignored. It happens all the time in Europe.
Political pressure in Europe is building and there doesn't seem to be much of a release valve: in a well functioning democracy you would see other politicians react to a popular upstart by co-opting some of their policies, but that doesn't seem to be happening much (except maybe in France a little bit?).
That makes the probability of France leaving the EU large than that of other european countries, though obviously still super small.
But we've had already a couple surprising voting results in the world stage recently right? So better be wary.
Also, Marine Le Pen (FN) may make it to the final round in the April/May election, but I don't think any poll sees her winning that round (I know, polls, Trump... touch wood!)
edit -spelling
However I really can't see the financial institutions of London choosing Dublin over somewhere like Frankfurt or Amsterdam.
The #1 reason bankers will shift will be due to 'passporting' issues - banks will require EU based personnel for legal reasons. In this case, I think it's easiest for London banks just to have staff in the easiest and most accessible place: Dublin.
Other than that - I don't see the reason why any jobs at all would go to Europe.
If they can do it from the UK, they will do that.
There is no growth in Europe, it's all in Asia.
Now - I believe the EU is trying to pull some Euro currency exchanges and clearing from London, in which case, there might to be another 'regulatory' reason to switch some people over.
But I think this is overblown. There's nothing pretty about banking in the EU.
London has not become more attractive because it's without EU regulatory limitations - and - they'll have considerable leverage with Theresa May etc. to win more concessions to make it even more competitive.
It's entirely plausible that there are even more banking jobs in London after this is all settled.
I said London City is going to win concessions from May in order to want to keep financial services in London.