Officials seek to convince financial groups to move operations after UK Brexit
yesterday by: Alistair Gray in New York
Emmanuel Macron’s election victory has given new impetus to France’s efforts to woo financial activity from London after Brexit, as officials pursue talks with at least 20 large companies to lure them to Paris.
US banks including Bank of America, Citigroup and Morgan Stanley are among the groups being urged to choose Paris over rival European financial centres, according to people briefed about the discussions.
BlackRock, the world’s largest asset manager, which employs more than 2,000 people in London, is also in talks with officials, who claim Mr Macron’s presidential victory is a “game-changer”.
JPMorgan Chase is also among the companies being targeted, even though the bank said this month it had already chosen Dublin, Frankfurt and Luxembourg to be its post-Brexit “anchors” in Europe.
US banks that use London as their European hub are preparing to shift business elsewhere. The UK’s looming departure from the EU threatens to strip them of the “passporting” rights that allow them to seamlessly operate across the bloc from the City.
Several American bankers said time may be running out for Paris to get banks to set up new operations in time for Britain’s scheduled departure from the EU in 2019. They were already leaning towards other locations, even if not all had yet said so publicly.
“They’re a bit late,” said one.
Frankfurt has emerged as a particular favourite.
However, French officials are also trying to encourage the companies to expand their existing operations in Paris after Brexit, with a focus on sales and trading activities.
“The election of a new president — very business-orientated — is a game-changer,” said Christian Noyer, the former French central bank governor who is playing a leading role in the push by Paris.
He said he had been telling the chief executives of large financial groups before Mr Macron’s win that “things might change significantly after the election” and that “it seems to be fully taking place now”.
French lobbyists last week hosted a conference in Manhattan, entitled “Brexit: Welcome to Paris”, at which a series of speakers highlighted the prospect of business-friendly reform. Asset managers fine tune Brexit contingency plans Britain’s departure from EU push fund houses to bolster presence in mainland Europe
Talking up Paris as a corporate and capital markets centre, Arnaud de Bresson, chief executive of the business lobby Paris Europlace, said: “I really don’t understand why some US banks are interested in Frankfurt. To be near the ECB [European Central Bank]? It’s like the difference between New York and Washington. Do you want to be near the police, or near your clients?”
Since the Brexit vote Paris has been running an aggressive campaign to poach jobs from London. Stuart Gulliver, HSBC’s chief executive, said the bank would shift 1,000 investment banking jobs to the city, but the French campaign has had few other successes.
“We haven’t seen any other CEO announcing things; we think they were waiting for the French election,” said Mr de Bresson.
US banks including Goldman Sachs have a sizeable presence in the French capital, but American financiers have long been cautious, complaining about high taxes, regulation and bureaucracy.