Frankfurt Woos Post-Brexit Bankers By Seductively Opening Thick, Leatherbound Rulebook

If "risk management arrangements" doesn't get your juices flowing, Germany might not be right for you.
By Thomas Wolf (Der Wolf im Wald) (Own work) [CC BY-SA 3.0], via Wikimedia Commons

By Thomas Wolf (Der Wolf im Wald) (Own work) [CC BY-SA 3.0], via Wikimedia Commons

In the wake of Britain's Brexit decision, big European cities have jostled for the opportunity to become the new City of London. From Amsterdam to Warsaw, local officials have touted the perks and quirks of their own regional financial centers to attract Britain's banking refugees. France ran a weird campaign urging City bankers to “try the frogs.” A Luxembourg official bragged it's “the only country left that still loves bankers,” which is the equivalent of saying self-esteem runs high amongst Luxembourgers.

Frankfurt has tried a different strategy. At a financial conference last fall, a German bank lobbyist pointed out that media likes to portray the city as “something between a cemetery and a backwater country” and waxed poetic about the quality of Frankfurt's air. If that wasn't enough to get the juices flowing, German regulators have a new plan to seduce Britain's bankers: a long, dry recitation of the country's financial code.

Reuters has the details:

German regulators will meet more than 20 foreign banks on Monday to spell out requirements for moving some operations to Frankfurt, people familiar with the matter said, as the city accelerates plans to win over business from London after Brexit.

[...] The sources said Bafin would make it clear that no "letter-box" operations would be accepted and that banks would have to have significant risk management arrangements and senior executives based in Frankfurt.

Among the 40-odd bankers reported to be attending the informational session are executives from Goldman Sachs, Morgan Stanley and Citigroup, Reuters reported, though nothing official is forthcoming from those banks. The perfectly named Hubertus Vaeth, Frankfurt's financial ambassador, estimated that some 10,000 jobs could land in the city as Brexit plans come into focus. “The demand has been so large from banks that the regulators have to be creative to keep up,” Vaeth said.

On one hand it might seem odd that Frankfurt is pitching itself to the post-Brexit banking world as a sepulchral backwater chock with strict Teutonic rules. But for all the companies fleeing from Brexit madness, there might be an upside to putting down roots in a country whose idea of temptation is a longwinded lecture about regulatory technicalities.