The day after the Brexit vote in March 2016, Hubertus Väth gave numerous interviews on a bridge over the Main River, the glass skyscraper of the European Central Bank visible in the background. The managing director of Frankfurt Main Finance, the city’s marketing outfit, encouraged banks seeking a new home on the Continent to pack their bags and move to Frankfurt.
Mr. Väth predicted Brexit fallout could help create 10,000 new jobs in Frankfurt by 2021. The most important battle in the competition for jobs from London, he said at the time, was the processing of euro-denominated derivatives transactions, also known as clearing, which are destined to leave Britain after Brexit comes into effect in March 2019.
Today, Mr. Väth’s early enthusiasm has dissipated. “Our starting position was perfect,” he said. “But the more time we lose in securing this business, the more the French are catching up.” Deutsche Börse’s subsidiary, Eurex, is locked in battle with Paris-based clearing house LCH to swoop on London’s clearing activities.
Financial managers blame Deutsche Börse, the German stock-exchange operator. Its planned merger with the London Stock Exchange would have made Frankfurt “almost the sure winner” in the struggle for the clearing business, according to Mr. Väth, but the merger deal fell through last March. Since then, Deutsche Börse has been virtually paralyzed by the uncertainties swirling around its boss, Carsten Kengeter, who is under investigation for insider trading.