Financial Institutions Looking To Move To Europe post-Brexit

A senior executive from a French financial regulatory body has said that post Brexit numerous financial centres in Europe have already started handling inquiries from financial firms regarding setting up of operations.

With the UK voting to leave the European Union in June, London could lose its tag as a financial hub if the British government pushes for a hard Brexit, as it would result in the loss of companies’ access to the EU’s single market.

Benoit de Juvigny, Secretary General of the AMF, France’s financial market regulator has stated recently that several informal queries have been received from companies looking to shift their base to Paris.

According to him, large international banking firms have already commenced due diligence exercises with regards to setting up a subsidiary in Paris.

PressTV News Videos

In a statement, de Juvigny said

In some cases, I would say, we are still at the level of inquiries or informal inquiries by consultants, by lawyers. But in other cases, especially regarding large international banks, it’s normal informal inquiries but they are already taking real due diligence and we’ve received a lot of practical questions regarding the way they are going to be managed, from our perspective, their relationship with the French regulatory.

De Juvigny stated that other centers such as Amsterdam, Frankfurt and Luxembourg were also receiving such queries. He however noted that there was no clarity yet on how far the discussions had progressed in these locations. A news report has cited sources saying that the cities being considered are Dublin, Frankfurt, Amsterdam, Luxembourg, Bratislava, Madrid, and Valletta, the capital of Malta.

De Juvigny said that he welcomed the new interest in Paris but added that it was also a challenging situation since it could encourage heavy competition between different EU countries and regulators seeking to attract these companies. He warned that such competition could result in companies operating under a lax regulatory system which could increase the chances of another financial crisis.

He has said that the French regulatory department would be expanded given the inflow of more companies. Marie-Celie Guillaume, director general of Defacto, which manages Paris’ business district, confirmed claims of heightened interest in Paris. She said that several companies particularly Chinese firms who were seeking to set up a base in Europe were making enquires in Paris.

Guillaume pointed out that prior to Brexit these companies might have perhaps favoured London but with the country’s planned exit from EU, other European cities were now being preferred.

---