BREXIT FALLOUT

British Banks Serious About Move to Germany

Canary Wharf Bank Skyline
This view will be replaced by Frankfurt's skyline for a number of London bankers. Source: DPA/HANNAH MCKAY

It’s long been known that, despite Europe’s Brexit blues, Germany’s financial sector might actually benefit from Britain’s decision to leave the European Union. Now it’s starting to get serious: Several London banks have reached out to the financial regulator BaFin about moving either their headquarters or certain business operations to Germany.

“We are being approached by banks that voluntarily want to submit to our regulatory authority,” said Felix Hufeld, the president of BaFin, during his first press conference of the year. “Banks, you guessed it, that are considering moving their headquarters or activities from London to Germany.”

Britain’s decision to leave the European Union has created uncertainty about the future status of British banks within the bloc. Currently, banks licensed in Britain are able to offer financial services throughout the entire European Union though so-called “passporting” rights.

Leading E.U. officials, however, have said that banks in London should no longer be able to handle trades denominated in euros after Britain leaves the bloc. The head of the London Stock Exchange, Xavier Rolet, has warned that London could lose tens of thousands of financial jobs as a consequence.

Frankfurt, the continent’s financial capital, expects to net many of those jobs. Mr. Hufeld, however, said BaFin wasn’t actively poaching banks from London. British banks had approached BaFin on their own volition, he said.

“As a German regulator we will offer financial service providers from other countries a dependable framework that enables them to offer their services under the new political auspices – in Germany and other countries of the E.U.”

Spencer Kimball is an editor with Handelsblatt Global. To contact the author: s.kimball@extern.vhb.de. 

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