Paris and Frankfurt battle it out to host European Banking Authority

Written by Martin Banks on 3 November 2017 in News
News

Cities bidding to host the European Banking Authority are intensifying their lobbying campaign ahead of a decision by the EU later this month.

Frankfurt at night | Photo credit: Press Association


There have been eight bids for the European Banking Authority (EBA), which is currently based in London but will be relocated when the UK leaves the EU in 2019.

The cities applying to host the EBA are Brussels, Dublin, Frankfurt, Paris, Prague, Luxembourg, Vienna and Warsaw.

The decision will be taken in the margins of the general affairs Council in Brussels on 20 November by a vote of the 27 ministers.


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Each of the bidding cities want to offer the authority a new home. The reason is simple: the presence of such a significant institution enhances the standing and prestige of the host location enormously.

The eight candidates have been busy in their efforts to sell their merits and details about their respective locations, for instance on infrastructure, transport links, working conditions and schools.

Some have also been making concrete promises. Luxembourg and Vienna, for example, are offering rent-free office space.

In the wake of Brexit, more and more banks are reportedly thinking of transferring their activities from London to Frankfurt. Deutsche Bank and Citigroup are two prominent examples.

Frankfurt - the clear favourite for many weeks - says it has a persuasive case with “hard facts”. Volker Bouffier, Prime Minister of the State of Hesse, says, “Despite our many competitors, we have a good hand.”

Frankfurt, says Bouffier, boasts a very good infrastructure and a large number of international banks and insurance companies “and is thus the most important financial centre in continental Europe.”

He says the existing supervisory structure, including the European Central Bank (ECB), the Insurance and Occupational Pensions Authority (EIOPA), the Deutsche Bundesbank, the German

Federal Financial Supervisory Authority (BaFin), the European Systemic Risk Board (ESRB) and the Single Supervisory Mechanism (SSM) “completes a unique network of relevant players in one place.”

Further comment comes from Rainer Waldschmidt, Managing Director of Hessen Trade and Invest GmbH, who says, “Many companies are looking for a safe haven in the EU following the Brexit decision. We want to make them an attractive offer. We can effectively provide them with a unique network of all the relevant actors.”

He says he knows “from many discussions with companies and political decision makers in London what the burning questions are that arise during any relocation.”

“Fact-based persuasion, not the loud beating of one’s own drum, is the best way to support the decision making process in his experience.”

Frankfurt, Germany’s financial capital, already has many private banks, the country’s main stock exchange, the German financial watchdog Bafin, the Bundesbank national bank and the European Central Bank.

But the German city faces competition from Paris, its biggest rival, which hosts four of the eight largest banks in the EU27.

A French diplomatic source in Brussels said, “It’s essential that the EBA is implanted in the heart of the financial ecosystem, allowing for a constant interaction with professionals in the sector.”

Bruno Le Maire, France’s economy and finance minister, says, “Paris has many strengths which could further the EBA’s development and influence. At the heart of a financial ecosystem of global dimensions, the capital boasts a strong banking presence at the service of a dense, dynamic business infrastructure. 

“It has premises available which are eminently suitable to meet the EBA’s needs, and good air and rail links making it easier for it to carry out its work with all its European and international stakeholders.

“Staff and their families will also benefit from the Paris region’s deep international labour market, exceptional provision of foreign language education and incomparable culture and leisure facilities.”

He adds, “France, consistent with its commitment to an ambitious European financial oversight system, will do everything in its power to facilitate the setting-up of the EBA, which since its creation has worked to promote financial stability and the convergence of oversight practices within the European Union.”

One of the biggest EU agencies, the EBA works to ensure effective and consistent prudential regulation and supervision across the European banking sector. Among other tasks, the EBA assesses risks and vulnerabilities in the EU banking sector through regular risk assessment reports and EU-wide stress tests.

The main task of the EBA is to contribute to the creation of the European single rulebook in banking.

 

About the author

Martin Banks is a senior reporter for the Parliament Magazine

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