FMF welcomes agreement between the European Union and the United Kingdom

“Frankfurt Main Finance welcomes the agreement reached between the European Union and the United Kingdom. This forms a basis for limiting the economic damage that could be caused by the withdrawal, creates clarity and reduces associated risks. At today’s annual meeting of the IMF and the World Bank, there is a palpable sense of relief in Washington amongst the banks who’ve long hoped for an agreement.

The compromise demonstrates that diplomacy between Brussels and London is intact, despite the intense arguments concerning an agreement over the past weeks and months. However, it remains to be seen whether the current agreement can be implemented.

The question of the backstop makes it clear that pragmatic solutions in the interests of both sides can be reached. This gives reasons to hope that that yet another victory in the negotiations can be reached in the near the future.”

Hubertus Väth, Managing Director of Frankfurt Main Finance

The Challenge - The Frankfurt Job

The Frankfurt Job: Uncover the true Soul of the Rhine-Main Area

The Frankfurt Job – Companies and banks based in FrankfurtRhineMain have long appreciated the region’s numerous locational advantages: Short distances, excellent transport and a pronounced internationality. Outside the region, however, it is often not known that, in addition to its undisputed economic strength, it is also an excellent place to live. For this reason, BBC hosts Billie JD Porter and Alhan Gencay have been sent on a discovery tour through the region. Both had never been to Frankfurt Rhine-Main before and didn’t know what to expect.

In a total of six episodes, you will go on a discovery tour to an apple wine grower, to the Kleinmarkthalle in Frankfurt, to the Kaiser-Friedrich-Therme in Wiesbaden, to the Frankenstein Castle for Halloween, to the new Frankfurt Old Town, to a family with international roots, to an international school, to the Frankfurt Opera and an international Stand Up Comedy Club. Both face the challenge with their typical British humour and meet people who bring them closer to the secrets and characteristics of FrankfurtRhineMain.

“The Frankfurt Job” is primarily aimed at people who work in internationally active companies. The aim of the English-language online campaign is to position FrankfurtRhineMain as an attractive location for international companies. The focus is on the lifestyle of the FrankfurtRhineMain region.

The campaign was initiated by FrankfurtRheinMain comprising 30 districts, cities, the state of Hesse, municipalities and associations. The company’s task is to inform foreign companies about the advantages of FrankfurtRhineMain as a business location, to promote FrankfurtRhineMain’s international competitiveness and to strengthen its image abroad. FrankfurtRheinMain GmbH is the central point of contact in the region for all enquiries regarding the establishment of companies from abroad.

Please find more information here.

Eschborn – the up-and-coming start-up location in the Financial Centre Frankfurt Rhine-Main

The Financial Centre Frankfurt Rhine-Main has plenty to offer, including an excellent start-up ecosystem. As part of the dynamic and international Rhine-Main region, the City of Eschborn is an ideal breeding ground for FinTechs and start-ups, attracting a growing number of companies. In our interview, Dong-Mi Park-Shin, Head of Economic Development of the City of Eschborn, explains why so many innovative companies and start-ups pick Eschborn as their preferred business location.

Eschborn is currently experiencing an enormous boost as a top location for businesses. Many innovative companies take up residence in the city, expanding the variety of industries based in Eschborn. What advantages is that trend creating for the City of Eschborn and the Financial Centre Frankfurt Rhine-Main?

Dong-Mi Park-Shin, Head of Eschborns Economic Development Agency

Dong-Mi Park-Shin, Head of Eschborns Economic Development Agency

The strengthening of Eschborn economic capacity is a major benefit. The increasing number of successful and innovative companies – which create and make use of synergies between companies and industries – allows the city to be positioned even more broadly in the future. By doing so, Eschborn can guard itself against industry-specific risks such as a financial crisis.

Due to the latest newcomers to the business scene and consequentially growing opportunities for cooperation and networking, the existing corporate landscape becomes increasingly attractive. Moreover, the fact that Eschborn is a key business location for well-known and high-profile companies – especially from the Pharma and Life Science sector – makes the city even more appealing.

Intensive cooperation between companies and surrounding universities – such as knowledge-sharing and financial support of research and development projects – creates further opportunities for all stakeholders involved. Besides fostering innovation, this also puts companies in a leading position in the “war for talents”: highly qualified talents can be effectively tied to the company and the region at an early career stage.

How are the City of Eschborn and the wider region benefiting from that?

The city generates a high trade taxes income, which is not only of benefit to the people living and working in Eschborn but also to the Financial Centre Frankfurt Rhine-Main. Due to municipal allocations and compensation, revenue generated by Eschborn is distributed and reinvested in various infrastructure measures. In addition to expanding schools, kindergartens, hospitals, and ambulances, the city supports cultural institutions such as English Theatre, the Städel and Dialogue Museum, the Opel Zoo as well as the preservation of the Eschborn-Frankfurt cycle race.

All these aspects contribute to a high quality of life in Eschborn and the Financial Centre Frankfurt Rhine-Main, which increases the attractiveness of the entire region and is a competitive advantage in the global competition – especially with regards to various Brexit scenarios.

Many start-ups opt for Eschborn as their business location. What are the decisive factors attracting up-and-coming companies?

Young entrepreneurs – at least in my experience – think, live and work nationally or globally. As part of the dynamic, international and successful Frankfurt Rhine-Main region, Eschborn has all the advantages the region has to offer.

What does this mean precisely?

Great mentors, networks, financially strong companies or venture capitalists (VC) with the necessary know-how are fundamental factors to the success of young companies – they are able to assess, evaluate and support start-up ideas. As an established financial hub, the Financial Centre Frankfurt Rhine-Main provides start-ups with a large number of committed business angels and VCs that have international networks.

In addition, many sponsors and partners such as the TechQuartier, Ernst & Young, Deutsche Börse, Deutsche Bank and GFT Technologies SE are based in Eschborn. This proximity allows for getting in touch with local companies much faster.

How does the City of Eschborn support young companies? How can start-ups and established companies foster mutual knowledge-transfer?

In cooperation with the RKW Kompetenzzentrum, the city of Eschborn advises start-ups free of charge. Furthermore, the city enables participation in various networking events such as Startup meets Mittelstand, Startup Safari, the Founder Summit, the Fintech Forum, and the EY Academy. Moreover, young entrepreneurs and companies have access to contacts and established networks of Eschborn’s Economic Development Agency. We are committed to the start-up economy of the Frankfurt Rhine-Main region and hence, are becoming more and more active. Promoting the cities start-ups in the local magazine “Standortmagazin” draws the regional founder’s attention to the business location Eschborn.

How will the business location Eschborn look like in the coming years?

The integrative urban development plan “Eschborn 2030+” is currently being worked on. It contains a management plan for the future of the city and the business location Eschborn. Thus, it is a prerequisite and framework laying out the conditions for companies and start-ups. Eschborn’s Economic Development Agency actively engages with political decision-making bodies in order to bring attention to the interests of the companies while taking the global megatrends into account. Only if these interests are taken into consideration, companies and the closely associated city and region can continue to develop in a positive direction.

 

 

 

Rheingau Music Festival – FMF and Hessen Agentur invite Traders

The Financial Centre Frankfurt Rhine-Main offers a high quality of life and a diverse cultural scene: As such, the Rheingau Music Festival – one of Europe’s leading summer music festivals – is dedicated to promoting young artists by providing a stage for outstanding talents. The internationally recognized event has proven to be a stepping stone for prosperous careers and the well-established format Classic Marathon puts a variety of rising classical music stars in the spotlight. The event took place On August 17th, 2019, at Schloss Johannisberg, a beautiful castle located at the summit of a vineyard-covered mountain high above the Rhine Valley.

Frankfurt Main Finance (FMF) and Hessen Agentur invited Traders, who recently moved to Frankfurt as a result of the Brexit referendum, to attend the Classic Marathon and enjoy the music of young virtuosi.

“We thank Hessen Trade & Invest for supporting the Classic Marathon. The event was attended by currency, bond, and equity traders from global financial institutions. Our thanks also go Union Investment for representing the buy-side and making ever more traders feel welcome in their new home, the Financial Centre of Frankfurt,” comments Frankfurt Main Finance Managing Director Hubertus Väth on the success of the trader’s event.

CFS survey: German financial industry now clearly expecting a “no-deal” Brexit

The new UK government under Prime Minister Boris Johnson is preparing to leave the EU on 31 October, with no agreement in place. Now the majority of the German financial industry is also expecting a “no-deal” Brexit. This was shown in a recent survey by the Center for Financial Studies. Of those surveyed, 55% consider a disorderly Brexit to be probable, and 31% even see it as very probable. Only 11% are more optimistic in this regard.

The majority of respondents (63%) believe the German financial sector is sufficiently prepared for a “no-deal” Brexit, while 36% see a need for further measures.

“Considering how likely a ‘no deal’ Brexit has become, the survey results are rather worrying, as there is little time left for market participants to make adjustments,” Professor Volker Brühl, Managing Director of the Center for Financial Studies, interprets the survey results.

The EU has ruled out any renegotiation of the Brexit deal and should not offer any further compromises in the hope of avoiding a “no-deal” Brexit. This opinion is held by the majority (70%) of the German financial sector. Nonetheless, the respondents also agree (61%) that the financial markets have not yet fully anticipated a “no-deal” Brexit scenario and that market distortions may therefore occur.

“The survey indicates that the financial industry is prepared to accept the potential drawbacks of a ‘no deal’ Brexit if it means finally obtaining clarity about future framework conditions,” Professor Brühl adds.

There is also a broad consensus among respondents (88%) that if the UK leaves the EU in a disorderly fashion, more business activities and employees will be relocated to continental Europe.

Hubertus Väth, Managing Director of Frankfurt Main Finance e.V., highlights: “Should there be a Hard Brexit, which the majority of respondents assumes is the most likely scenario, it will be important for the Financial Centres in continental Europe to demonstrate their efficiency. If we succeed in cooperating across borders, Europe could emerge from the crisis even stronger.”

 

 

CFS Index remains on downward trend

Financial industry records a significant decline in investment volume growth / Financial institutions report rising earnings growth accompanied by weaker revenue growth and fewer job cuts

The CFS Index, which measures the business climate of the German financial sector on a quarterly basis, falls by 2.5 points to 109.9 points. The index thus remains on a downward trend that began a year ago. The current decline can be attributed in particular to significantly lower growth in the investment volume of the financial industry. In addition, the financial institutions report lower revenue growth, though this is offset by higher earnings growth and fewer job cuts. The service providers also indicate a low level of revenue growth. This is coupled with a decline in earnings growth, which is at a very low level compared to the previous year. The service providers are optimistic about the current quarter.

“The declines in the core indicators of revenue, earnings and investment, with overall employment remaining unchanged, underscore the difficult situation faced by the sector, where the deteriorated outlook is now affecting the service providers as well as the banks,” Professor Jan Pieter Krahnen, Director of the Center for Financial Studies, interprets the results.

The future international importance of the Financial Centre Germany continues to consolidate, repeating its decline of 3.6 points from the previous quarter, yet remains at a positive level of 119.7 points. The latest decrease reflects the assessment of the service providers. Their index value falls by 11.8 points to 121.8 points. After dropping sharply in the first quarter, the assessment of the financial institutions has been revised upwards again. Their sub-index rises by 4.4 points to 117.6 points. This means the assessments of the financial institutions and the service providers have largely converged.

Dr. Lutz Raettig, President of Frankfurt Main Finance e.V., emphasises: “The differing trends of financial institutions and service providers appear to reflect a wait-and-see attitude. We will probably not know which direction we are heading until after 31 October – the next possible Brexit day.”

Revenue growth of financial institutions declines

The growth of revenues/business volume among the financial institutions declined in the second quarter. The corresponding sub-index falls by 3.0 points to 112.0 points. A further slight decline is expected in the current quarter. The revenues of the service providers, at 110.9 points, remain almost unchanged at the low level of the previous quarter (-0.3 points), though they remain optimistic regarding the current quarter.

Considerable earnings growth among financial institutions / Falling earnings growth among service providers accompanied by a positive outlook for the current quarter

Earnings growth among the financial institutions was positive in the second quarter, as anticipated. The sub-index rises by 3.4 points to 104.4 points. By contrast, the sub-index for the service providers falls by 3.7 points to 103.5 points, which is very low compared to one year ago (-24.2 points). As with their revenues, the service providers remain optimistic about their earnings growth in the current quarter. The financial institutions are anticipating a decline in earnings growth.

Financial industry investment volume is down

The financial industry reports lower growth in investment volume in product and process innovations in the second quarter. The corresponding sub-index for the financial institutions falls by 5.8 points to 106.1 points. The service providers register a decline of 4.9 points to 109.9 points. For the current quarter, the financial institutions are expecting another slight decline; the service providers are more optimistic.

Fewer job cuts at financial institutions / Employee growth among service providers remains constant

Job cuts at the financial institutions have eased slightly. The employee numbers sub-index therefore rises by 2.5 points to 98.7 points. An almost unchanged level of job cuts is expected in the current quarter. The service providers report stable employee growth, with the corresponding sub-index remaining unchanged from the previous quarter at 112.4 points. Employee numbers among the service providers are expected to increase slightly in the current quarter.

 

Paris Europlace International Financial Forum: New Frontiers in Finance

Panel discussions, expert talks, and networking: The chances and challenges facing the global financial industry – including digitalisation and sustainable finance – were discussed at the International Financial Forum, which took place in mid-July 2019 in Paris. In a workshop moderated by Arnaud de Bresson, Chief Executive Officer of Paris Europlace and Chairman of the World Alliance of International Financial Centres, Frankfurt Main Finance (FMF) Managing Director Hubertus Väth discussed the cooperation between International Financial Centres (IFCs) and global economic growth alongside representatives from the IFCs Toronto, Astana, Tokyo and Abu Dhabi.

Digitalisation and Sustainable Finance in the Financial Industry

From July 9th to July 10th, financial industry experts, CFOs, CIOs, senior executives, investors and representatives of financial services providers, regulators, and politicians met at the annual International Financial Forum near the famous Champs-Élysées in Paris to discuss:

  • Sustainable Finance
  • European perspectives in a globally changing world
  • Digital trends in Finance
  • Growing capital markets

Two of those topics – digitalisation and green finance – were emphasized in the closing address presented by Francois Villeroy de Galhau, Governor of the Banque de France: The theme of this Forum – ‘New Frontiers in Finance’ – prompts us to look towards new territories that we have to explore and conquer. Regarding finance, I will focus on two of them: digitalisation and green finance. (…) Digitalisation is shaking up the way we live and consume, opening up a world of possibilities for corporates and customers alike. Worldwide, it clearly represents both an opportunity and a challenge for banks, as well as for supervisors. (…) We are currently witnessing a growing awareness from central banks, supervisors and financial institutions about climate-related risks. Clearly, green finance and climate risks management have gone from the ‘nice to have’ to the ‘must have’, from emotion to reason.

International Financial Centers: Cooperation for Economic Growth

In a workshop moderated by Arnaud de Bresson, Chief Executive Officer of Paris Europlace, FMF’s Managing Director Hubertus Vaeth, discussed Cooperation between International Financial Centres and economic growth alongside Keiichi Aritomo, Executive Director of FinCity Tokyo, Kairat Kelimbetov, Governor of the Astana International Financial Centre, Jennifer Reynolds, President & CEO of Toronto Financial International, and Philippe Richard, Director of the Financial Services Regulatory Authority, Abu Dhabi Global Market.

While Arnaud de Bresson highlighted the significance of financial technology, globalisation as well as green and sustainable finance for Financial Centres he also pointed out, that it is vital to further convey the relevance of International Finance hubs to the general public. Kairat Kelimbetov agreed and added that International Financial Centres should not only concentrate on the banking sector but rather focus on promoting the economy. Philippe Richard informed the workshop participants about current solar energy and Green City projects conducted in the United Arab Emirates and Abu Dhabi. Moreover, Hubertus Väth emphasized the role of young, innovative and agile start-up companies – which bridge the gap between agile technology and the financial sector – as a central competitive factor for all financial institutions.

Please find a photo gallery of the event on the Homepage of Paris Europlace.

Astana Finance Days

Astana Finance Days

What are the challenges that international and regional financial centers around the globe are facing? What new trends can be observed and what new opportunities are arising that can shape the future of regional and global financial markets? Those and many other questions were discussed by global thinkers, policymakers, representatives from business, public service, and academia discussed at the Astana Finance Days in Nur-Sultan, Kazakhstan, in July 2019. During the 4 day-long conference, the participants debated issues and opportunities related to governance, infrastructure, financial technology as well as global cooperation of International Financial Centres (IFCs).

With a shift in the balance of power between leading IFCs in Asia, North America, and Europe, that has occurred in the last decades, the role of IFCs has changed and so has their collaboration. Thus, on the second day of the conference, a panel moderated by the World Alliance of International Financial Centers’ (WAIFC) Managing Director Dr. Jochen Biedermann discussed the competitiveness of IFCs in a rapidly changing economy as well as the attractiveness of established IFCs vs. emerging IFCs. Frankfurt Main Finance’s president Dr. Lutz Raettig joined the panel “International Financial Centres: the outlook to 2025 and beyond” alongside Sandy Frucher, Vice Chairman of Nasdaq, Frederic de Laminne de Bex, Secretary-General of the Belgian Finance Club and James Martin, Deputy CEO of  AIFC.

Another theme that receives increasingly more attention was discussed by WAIFC representatives from Brussels, Busan, Casablanca, Frankfurt, London, Luxembourg, Mauritius, Moscow, Nur-Sultan, and Paris: FinTech talent development and capacity building, both of which are highly important for the success of Fintech ecosystem building. A lively panel discussion evolved around including FinTech into the curriculum of business schools, foreign education programs funded by local governments, short-term courses as well as professional certification and re-training of seasoned financial professionals.

However, global cooperation between IFCs was not just a topic during the conference: On the last day of the event, the WAIFC presented an Honorary Award to Nursultan Nazarbayev, First President of Kazakhstan, for creating the AIFC and his significant contribution to fostering global cooperation among International Financial Centres.

Frankfurt Finance Summit 2019: Navigating in Uncertain Waters

Since 2011, the Frankfurt Finance Summit has been held annually in the Financial Centre Frankfurt. Under this year’s motto Navigating in Uncertain Waters, more than 200 high-calibre personalities from the domestic and international financial world came together on 18 June 2019 to discuss the topics:

  • Financial Centre Germany: Strategies for Succeeding in Rough Times
  • Artificial Intelligence (AI) in Finance: Superpower or Super Risk, Revolution or Buzzword
  • Connecting values: a digital finance hub for Europe
  • Post-election Europe facing Brexit: Securing stability for functioning markets

The participants represented a broad spectrum of the financial services industry – mainly decision-makers from central banks, stock exchanges, supervisory authorities, banks, insurance companies, politics, companies and academia.

Dr. Lutz Raettig, President of Frankfurt Main Finance, opened the Frankfurt Finance Summit with a warm welcome to all participants and speakers. After the welcoming speech by Dr. Philipp Nimmermann, State Secretary in the Hessian Ministry of Economics, Energy, Transport and Housing, Dr. Jörg Kukies, State Secretary in the Federal Ministry of Finance, took the floor. Dr. Kukies referred to the need to prepare as best as possible for all Brexit scenarios. Although great success had already been achieved in the implementation of important measures, Europe had so far failed to reach a European agreement on a Sustainable Finance taxonomy. A European agreement, however, remains extremely important for a sustainable financial system.

Financial Centre Germany: Strategies for Succeeding in Rough Times

During the first panel discussion, a survey of the audience revealed that the majority of Summit participants believe that the future of the German banking sector lies in Europe. This view was also shared by the German head of BNP Paribas Paribas Lutz Diederichs. In his opinion, the German banking sector is not dependent on the domestic market, but strongly internationalised. Prof. Dr. Isabel Schnabel, Professor of Financial Market Economics at the Rheinische Friedrich-Wilhelms-Universität in Bonn, also confirmed this trend. She highlighted the weaknesses of the euro structure and confirmed that Germany needed more reforms in this respect. Cornelius Riese, co-chairman of DZ Bank, spoke in favour of a more comprehensive strategy. In addition to market capitalisation, factors such as culture and stakeholder interests are essential metrics for assessing the financial system or a financial institution.

Artificial Intelligence (AI) in the Financial Industry: Superpower vs. Super Risk, Revolution or Phrase

The discussion continued with a discussion on the use of artificial intelligence in the financial industry in which Prof. Dr. Martin Hellmich, Partner at Deloitte, Carsten Mürl, Director Product Management at Mastercard, Dr. Holger Rommel, Head Research and Digital Transformation at ti&m, Vahe Andonians, Senior Lecturer at the Frankfurt School of Finance & Management, and Chris Boos, founder of Arago, participated. First and foremost, Chris Boos, an AI pioneer from Germany, cleared up prejudices about the topic. The general fear of AI is completely unfounded. Although AI has developed even more rapidly in the last five years than the last 50 years combined, man would not be dominated by the machine in the future. Accordingly, understanding and trust are the decisive keys to the use of AI in the financial industry.

Connecting values: a digital financial hub for Europe

During the subsequent power talk between Prof. Dr. Joachim Wuermeling, Member of the Board of Deutsche Bundesbank, and Hubertus Väth, Managing Director of Frankfurt Main Finance, the Financial Centre Frankfurt was closely examined. Prof. Wuermeling stated that after the Brexit referendum a competition was triggered between European financial centres in advertising for business, jobs and employees from London. It wasn’t just about who got a piece of the cake, but how big it was. The Financial Centre Frankfurt had to decide whether it wanted to take over a cooperative or a competition-oriented approach. His advice would be to follow the cooperative approach, since cooperation could win a bigger piece of the cake. Wuermeling also expressed confidence that Frankfurt would assume leadership in the European finance sector five years after Brexit.

Post-election Europe facing Brexit: Securing stability for functioning markets

In the concluding panel discussion, John Berrigan, Deputy Director General of the EU Commission, similarly advocated a banking union. This could increase the EU’s weight at the global level. With regard to Brexit, Mr Berrigan said that all those involved should do everything in their power to minimise the risks as far as possible. Matthias Graulich, member of the Executive Board of Eurex Clearing AG, cited the indispensability of incentives so that each individual would be motivated to contribute to stability. Felix Hufeld, President of the Federal Financial Supervisory Authority (BaFin), drew attention to the general fatigue surrounding the issue of Brexit. Although Brexit is complex and unpredictable, he also warned against viewing the world only through the lens of Brexit. After all, it was not about London against the rest of the world. Looking back on the developments of the past years, according to Felix Hufeld it should not be forgotten that in the financial sector at the European level many important improvements were made in a very short time.

The 9th Frankfurt Finance Summit ended with a summary of the day’s keynote speeches and a closing remarks by Michael Speth, Member of the Board of DZ Bank.

  • Dr. Lutz R. Raettig, Chairman of the Executive Committee, Frankfurt Main Finance e.V

  • Dr. PhilippNimmermann, State Secretary, Hessen Ministry of Economics, Energy, Transport and Housing

  • Dr. Jörg Kukies, State Secretary, Federal Ministry of Finance

  • Prof. Dr. Uwe StegemannSenior Partner, McKinsey & Company, Lutz Diederichs, CEO, BNP Paribas Germany

  • Prof. Dr. Isabel Schnabel, Member of the German Council of Economic Experts, Professor of Financial Economics, University of Bonn

  • Frank Strauß, Member of the Management Board, Head of Private & Commercial Bank, Deutsche Bank

  • Dr. Cornelius Riese, Co-Chief Executive Officer, DZ BANK AG

  • Inken Schönauer, Editor-in-Chief, EURO FINANCE magazin, Chris Boos, CEO & Founder, arago

  • Vahe Andonians, Senior Lecturer, Frankfurt School of Finance & Management, Chris Boos, CEO & Founder, arago, Prof. Dr. Martin Hellmich, Partner, Deloitte, Carsten Mürl, Director Product Management, Mastercard, Dr. Holger Rommel, Head Research & Digital Transformation, ti&m

  • Prof. Dr. Joachim Wuermeling, Member of the Executive Board, Deutsche Bundesbank, Hubertus Väth, Managing Director, Frankfurt Main Finance e.V.

  • Stephan Lutz, Partner, Capital Markets Leader, PwC Germany, John Berrigan, Deputy Director General Directorates B, C, D and E, DG Financial Stability, Financial Services and Capital Markets Union, European Commission, Maria Demertzis, PhD, Deputy Director, Bruegel, Matthias Graulich Member of the Executive Board, Eurex Clearing; Global Head of Fixed Income, Funding and Financing Strategy and Development, Deutsche Börse Group, Felix Hufeld, President, Federal Financial Supervisory Authority (BaFin), Boštjan Jazbec, PhD, Member of the Board and Director of Resolution Planning and Decisions, Single Resolution Board

  • Ram Shoham, Founder of Accelerator Frankfurt and Andreas Glänzel, Managing Director of Frankfurt Main Finance

  • Michael Speth, Member of the Executive Board, FIRM; Member of the Executive Board, DZ BANK

“Navigating in uncertain waters”

Speech by Dr. Philipp Nimmermann, Frankfurt Finance Summit, 18 June 2019

“Navigating in uncertain waters” was the title of this year’s Frankfurt Finance Summit. In his opening speech, Dr. Philipp Nimmermann, State Secretary at the Ministry of Economics, Energy, Transport and Housing of the State of Hesse, addressed four challenges arising from this topic: Artificial Intelligence, Climate Change and Sustainability and Brexit. Read the opening speech of the Frankfurt Finance Summit 2019 below:


Dr. Philipp Nimmermann, State Secretary at the Ministry of Economics, Energy, Transport and Housing of the State of Hesse

“The title of today’s summit, „Navigating in uncertain waters“, leaves us plenty of room for discussions. Please allow me to concentrate on three topics: Artificial Intelligence, Climate Change and Sustainability, as well as BREXIT.

Let me start with my personal political guiding principle, which helps me navigate in uncertain waters. It is an adaptation of the ethical imperative, the Austrian born Cybernetician and Physicist, Heinz von Foerster, once formulated. It goes like this: “I shall try to act always so as to increase society’s total number of choices”. But how do we keep our options open or even increase our choices? By remaining open minded and flexible, by not putting all our eggs in one basket, and by thinking in non-linear rather than linear terms.

If uncertainty is high or even increasing, if the world appears to be getting more and more complex, it probably helps to leave beaten tracks and to broaden ones mind, by using a new type of intelligence one has not used before.

So let’s talk about artificial intelligence: In my opinion, artificial intelligence is both a source of uncertainty as well as a method to navigate through uncertain waters. Yes it is true, that we cannot precisely predict how deeply machine learning and self-improving algorithms will actually change the world as we know it. But I do not think that one has to fear this development, at least as long as we share a common consensus that all technology, old or new, should always serve the people. That’s why I actually prefer the term “Augmented Intelligence” over “Artificial Intelligence”.

Machine intelligence can help us better understand big data and complex systems, e.g. by structuring previously unstructured data. By allowing so called “unsupervised machine learning” to help us identify clusters or anomalies we have not identified or thought of before, we can definitely broaden our choices.

So what is the State of Hessen, in this case, the Ministry for Economic Affairs, doing in this respect?

We initiated the foundation of the so called TechQuarter more than two years ago, as a start-up hub, especially for fintechs. This is the corner stone of our startup ecosystem-strategy. The current coalition treaty has also put a special focus on artificial intelligence and technological innovation.

Additional to expanding the TechQuarter, we want to establish a TechCampus with around 20 Professorships. With this lighthouse project, we want to help transforming the already excellent research successes in Hessen into applied technologies and startups.

Together with the TechQuarter and other interested partners, we want to establish an AI- and Big- Data-Lab, where researchers, supervisory bodies and fintech-start-ups can use big-data from various sources to develop and verify machine-learning tools. I am convinced, that this data-lab will significantly strengthen the Frankfurt financial centre.

Let me come to another source of uncertainty: climate change and sustainable development. There might be different views on whether climate change is man-made, or, on which measures are the right ones to slow down this development.

There might even be the question, whether the state should play an active role. But to all the doubters out there: Do you really want to take the responsibility for not having acted in a timely manner? What is your plan B, in case you have been wrong?

As long as we do not discover a Planet B, we should keep our options open or even increase future choices for subsequent generations. Hence, we should do everything possible to keep this planet alive and to foster an environmentally and socially sustainable development throughout the world.

Again, what are we doing in this respect?

With the Ministry for Economic Affairs being responsible, both, for implementing the so-called “Energiewende” in the State of Hessen and for Frankfurt’s role as a leading financial centre, we took an active role in the formation of the Green and Sustainable Finance Cluster Germany.

This cluster is a very important element of our strategy to transform this region in a truly green and sustainable financial centre, by helping to develop a common taxonomy and by defining common standards.

And we have already seen some success:

On a European level, two members of the cluster were selected to be part of the Technical Expert Group on Sustainable Finance, which supports the EU Commission in the implementation of the Action Plan.

On a national level, as recently as two weeks ago, the inaugural meeting of the advisory council on sustainable finance to the German federal government took place, chaired by Karsten Löffler, who is one of our cluster‘s executive directors.

And a few weeks ago, the majority of the state secretaries of the Länder Ministries of Economic Affaires voted in favour of a resolution, introduced by Hessen, which asked the federal government to develop general guiding principles for a sustainable finance sector in Germany.

We are looking forward to further developments in this direction and perhaps Jörg Kukies can elaborate on that subject later on.

Last but not least, there is the BREXIT. Or is it? We are all eagerly awaiting who will lead the UK out of the European Union. But we are prepared: Right after the BREXIT vote, we started an intensive exchange with the financial institutions and the non-financial corporates in Hessen. We traveled abroad to promote Hessen as an excellent business location, supportet by local stake holders and federal representatives such as Jörg Kukies, Sabine Mauderer and Joachim Nagel. Thank you very much again, for your support. I do not think we can do much more on that front. Life after BREXIT is difficult to predict.

But to keep our options open, we should keep our communication channels open and start discussing with our old and new partners in the UK, on how we all can manage the new situation for our mutual benefit.

Before that, I would like to wish you all an inspiring summit and fruitful discussions, which will certainly help us all to navigate in these uncertain waters.”



Titel photo: © HMWEVW – Oliver Rüther.

Photo of Frankfurt Finance Summit: © dfv Euro Finance Group GmbH I Photographer: Axel Gross