France insists battle for post-Brexit banking jobs isn’t over
Pedestrians walk across a plaza as skyscrapers stand in La Defense business district of Paris
France’s financial lobby insists the battle for post-Brexit banking jobs isn’t over.
Leaders of big European and global banks including JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon and HSBC Holdings Plc’s Stuart Gulliver met in the French capital yesterday for the annual forum organized by Paris Europlace, its main financial lobby group, to discuss the future of banking in Europe. Prime Minister Edouard Philippe, who last week announced three finance-friendly initiatives, gave the keynote address over lunch.
Until now, stiff firing and hiring rules, high taxes and a spike in political risk during this year’s presidential election held back Paris’s efforts to win jobs as the U.K. prepares to quit the European Union. While Frankfurt and Dublin have garnered several relocation commitments, HSBC is the only major international bank that has publicly expressed a preference for Paris. But French politicians and executives say they have more cards to play as President Emmanuel Macron, a former investment banker, prepares to cut taxes and overhaul French labor law.
“We want Paris to become the No. 1 financial hub after Brexit,” he said in English to a conference hall notably fuller than it has been in recent years. “The government is committed to making Paris more attractive” to finance and business.
Societe Generale SA plans to move up to 400 roles from London to Paris, mostly in corporate and investment banking, a spokeswoman said Tuesday, confirming an earlier Reuters report. Frederic Oudea, CEO of France’s third-largest bank by market value, had said after last year’s Brexit vote that for his company “flexibility” to move hundreds of jobs between its London and Paris hubs was “not a complex operational issue.”
While banks including Standard Chartered Plc and Nomura Holdings Inc. have picked Frankfurt as their new EU base, any flow of jobs out of London is likely to be slow and scattered across several cities, meaning that Paris, home of four systemic lenders and a large asset-management industry, can get a slice of the pie, said Arnaud de Bresson, Paris Europlace’s managing director.
“We have a bank here, we have critical mass, we also recognize that there is a a very critical mass of real-economy companies,” Gulliver said. HSBC’s French bank has “all the licences” it needs to serve clients across EU-27 nations and “it would be actually irrational for us to look at another location,” he said.
Paris is hoping to lure 20,000 jobs from the U.K. as firms seek EU locations to secure continued market access to the bloc, according to Paris Europlace. HSBC, which has a French retail bank, has said it may relocate as many as 1,000 traders to the French capital. JPMorgan, the U.S.’s largest bank, plans to move hundreds of London-based bankers to Dublin, Frankfurt and Luxembourg “in the short term,” Daniel Pinto, head of its investment bank, said in May.
“Where your legal entity is based is not where your people are based,” Dimon said. “The people could be in Paris, in the Netherlands, or Madrid or anywhere in the EU. We haven’t decided yet,” he said, adding that he sees “enormous leeway” for France’s new government.
Paris ranks 29th on the ranking of Global Financial Centres Index by Z/Yen Group Ltd., just above Casablanca and behind Munich. London tops the list, followed by New York and Singapore. The index, which is updated every six months, was compiled from an on-line survey of more than 3,000 financial professionals and it also uses gauges in areas such as business environment, human capital and infrastructure.
Paris, long burdened by the French tax and labor-law systems, suffered an additional image blow when Francois Hollande, Macron’s predecessor, took power by calling finance his “enemy.”
Virtually all executives and bankers consider Macron’s election as shifting sentiment following last year’s Brexit referendum and as Donald Trump became president of the U.S. after campaigning on a protectionist promises. Macron’s action to reform the job market is seen as critical. Last month, a Brexit report from a committee at France’s senate warned that three bankers could be hired in Frankfurt for the cost of two in Paris. Fabio Benedetti-Valentini, Bloomberg
