FRANKFURT: Germany’s top regulators met about 50 envoys from foreign banks on Monday to explain how they could move business to Europe’s biggest economy after Britain leaves the European Union, German financial watchdog Bafin said.
Bafin, which has been approached by numerous banks in recent weeks, said it answered questions from the banks such as how to get a banking license in Germany. One official said representatives of about 25 banks had attended.
Peter Lutz, a Bafin official in charge of bank oversight, said the authorities wanted to help banks considering a move to understand the rules in Germany.
“Foreign banks are welcome,” Lutz said, adding that U.S. banks, “real UK banks”, as well as lenders from Japan and Australia had attended the meeting.
He said he had made clear that strict rules would apply. “It’s not enough to have a letter box here,” he said, adding that senior managers must also be based in Germany.
The meeting underscores a growing willingness to consider alternatives to London, after Prime Minister Theresa May said that Britain would leave the EU’s single market, a move that would isolate the City of London from many European clients.
Executives, chiefly those in charge of regulatory issues, from banks including Morgan Stanley, Goldman Sachs and Citigroup were to attend the meeting in Bafin’s Frankfurt offices, people familiar with the matter have said. Those banks declined to comment.
Many Germans are skeptical of the aggressive practices of largely U.S. and British investment banks.
Nonetheless, the country’s politicians are seeking to show a friendly face to banks in London searching for alternative locations in the European Union to continue selling in the bloc once Britain leaves.
May has said her government will invoke Article 50 of the EU treaty, starting two years of negotiations to arrange Britain’s departure, by the end of March.
Frankfurt looks set to be one of the biggest winners from any exodus from London.
Hubertus Vaeth, head of Frankfurt Main Finance, a group backed by local government to promote the city, has predicted that 10,000 jobs will move from London to Frankfurt over five years, with investment banks among the early movers.
Lutz said that no bank had yet signed up to move and that he expected decisions to be made around the end of March.
Germany’s economic strength and the fact that Frankfurt is home to the European Central Bank makes it attractive for banks.
But it faces hurdles. There is a shortage of housing, while the region’s 13 international schools are already well subscribed. Nightlife in the city – where many bars are largely empty for much of the week – is also seen as a turn-off.