Frankfurt Joins the Race to Lure Away British Banks After Brexit
- The proposal seeks to relax the employment law allowing banks to easily fire highly-paid employees in a downturn.
In the last few weeks following Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term, several European cities have scrambled to tempt away London bankers including Paris, Amsterdam and Dublin, amongst others.
In fact, less than two weeks after the UK public voted to leave the European Union in July, Finance Magnates reported that Berlin was already looking to steal London’s crown as Europe’s centre of fintech.
Today, Bloomberg reported that another German city, this time Frankfurt, has launched its own Brexit pitch: to make it easy to fire bankers.
Employment Laws
Hesse, the German state regarded as country’s financial Hub Hub A hub as its name suggests describes the center of activity or a focal point. In terms of finance, the term hub can refer to Hub and Spoke Trading or a liquidity hub. However, the terms are not interchangeable, but they do overlap. Hub and Spoke trading refer to a network that posts bids and offers for an asset and therefore creates a real market. For example, Hub and Spoke trading allow traders to see the other submissions and offers from other traders on the platform. This is a popular method A hub as its name suggests describes the center of activity or a focal point. In terms of finance, the term hub can refer to Hub and Spoke Trading or a liquidity hub. However, the terms are not interchangeable, but they do overlap. Hub and Spoke trading refer to a network that posts bids and offers for an asset and therefore creates a real market. For example, Hub and Spoke trading allow traders to see the other submissions and offers from other traders on the platform. This is a popular method Read this Term, is looking at ways of loosening the employment law which would enable banks to easily fire highly paid employees in a downturn, something that banks can already do in the UK.
The move could make Frankfurt more attractive to companies considering moving away from London.
Although it is likely to take a few years before Britain actually leaves the European Union, the eventual Brexit could threaten the ability of the City’s financial sector to do business throughout the bloc.
In Bloomberg’s report, Uwe Becker, Frankfurt’s deputy mayor and treasurerת said: “We’ve got to get ahead of the situation on Brexit before other cities like Paris and Milan do.”
Current German employment law makes the dismissal of top executives difficult and many CEOs and Brexit teams are said to be afraid of German employment laws and contracts.
Extending the more relaxed rules to all top money makers with annual salaries of over 300,000 euros ($339,000) has therefore been suggested.
The Association of Foreign Banks in Frankfurt has also floated the idea of a three to five year ‘grace period’ during which jobs relocated from London would be governed by British rules.
Unions
There is a catch - any change would need to take place at the national level and Germany’s Labour Ministry, which is responsible for employment law, is run by the Social Democrats, who have close ties to unions.
In the meantime, Hesse is focusing on its list of advantages that Frankfurt has over rival cities such as a competitive tax structure and strength of the region’s economy.
According to Frankfurt officials, the goal is not to steal jobs from London, but rather to ensure that any jobs that end up leaving the City end up in Frankfurt rather than one of its continental rivals.
Frankfurt has stressed that it is “a sensible, business-friendly place built around finance.”
Making a comparison with Paris, for example, “the city of light, the city of love, and a city of lunch", Hubertus Väth, head of the Frankfurt Main Finance trade group, added: “And in finance, lunch is for losers.”
In the last few weeks following Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term, several European cities have scrambled to tempt away London bankers including Paris, Amsterdam and Dublin, amongst others.
In fact, less than two weeks after the UK public voted to leave the European Union in July, Finance Magnates reported that Berlin was already looking to steal London’s crown as Europe’s centre of fintech.
Today, Bloomberg reported that another German city, this time Frankfurt, has launched its own Brexit pitch: to make it easy to fire bankers.
Employment Laws
Hesse, the German state regarded as country’s financial Hub Hub A hub as its name suggests describes the center of activity or a focal point. In terms of finance, the term hub can refer to Hub and Spoke Trading or a liquidity hub. However, the terms are not interchangeable, but they do overlap. Hub and Spoke trading refer to a network that posts bids and offers for an asset and therefore creates a real market. For example, Hub and Spoke trading allow traders to see the other submissions and offers from other traders on the platform. This is a popular method A hub as its name suggests describes the center of activity or a focal point. In terms of finance, the term hub can refer to Hub and Spoke Trading or a liquidity hub. However, the terms are not interchangeable, but they do overlap. Hub and Spoke trading refer to a network that posts bids and offers for an asset and therefore creates a real market. For example, Hub and Spoke trading allow traders to see the other submissions and offers from other traders on the platform. This is a popular method Read this Term, is looking at ways of loosening the employment law which would enable banks to easily fire highly paid employees in a downturn, something that banks can already do in the UK.
The move could make Frankfurt more attractive to companies considering moving away from London.
Although it is likely to take a few years before Britain actually leaves the European Union, the eventual Brexit could threaten the ability of the City’s financial sector to do business throughout the bloc.
In Bloomberg’s report, Uwe Becker, Frankfurt’s deputy mayor and treasurerת said: “We’ve got to get ahead of the situation on Brexit before other cities like Paris and Milan do.”
Current German employment law makes the dismissal of top executives difficult and many CEOs and Brexit teams are said to be afraid of German employment laws and contracts.
Extending the more relaxed rules to all top money makers with annual salaries of over 300,000 euros ($339,000) has therefore been suggested.
The Association of Foreign Banks in Frankfurt has also floated the idea of a three to five year ‘grace period’ during which jobs relocated from London would be governed by British rules.
Unions
There is a catch - any change would need to take place at the national level and Germany’s Labour Ministry, which is responsible for employment law, is run by the Social Democrats, who have close ties to unions.
In the meantime, Hesse is focusing on its list of advantages that Frankfurt has over rival cities such as a competitive tax structure and strength of the region’s economy.
According to Frankfurt officials, the goal is not to steal jobs from London, but rather to ensure that any jobs that end up leaving the City end up in Frankfurt rather than one of its continental rivals.
Frankfurt has stressed that it is “a sensible, business-friendly place built around finance.”
Making a comparison with Paris, for example, “the city of light, the city of love, and a city of lunch", Hubertus Väth, head of the Frankfurt Main Finance trade group, added: “And in finance, lunch is for losers.”