- Germany is an attractive location for the international financial industry
- The new federal government can, however, increase its attractiveness even further
- Internationally agreed and harmonised regulatory frameworks guarantee international financial stability
“We see an unbroken interest in the German financial centre among banks that are considering relocations due to Brexit. Supervisors and politics have already done a lot over the past 18 months and are well positioned, but we must continue to work,” says Stefan Winter, Chairman of the Board of the Association of Foreign Banks in Germany (VAB) at today’s press conference. Among other things, there is a need for action to limit severance payments to high earners in the banking sector and to internationalise the law. For example, German law is often not agreed upon internationally in framework agreements, because German courts also examine these in commercial transactions as well as all general terms and conditions for consumers. “As a result of the Brexit, we expect about 20 banks to expand their presence here. This will involve up to 5,000 new jobs in the next two to three years, many of which will be hired locally. Much will of course depend on whether there will be transitional periods. In fact, everyone agrees that there must be transitional arrangements. But no one can say for sure today whether there will be any. Our members are therefore still planning to have fully operational units in Germany on 29 March 2019 so that they can continue to provide financial services for their customers,” Winter emphasises.
Silvia Schmitten-Walgenbach and Guido Zoeller, the two vice-chairmen, emphasise the stable number of employees in the member institutions, which are also attributable to the good framework conditions and the still prosperous German economy. In addition to the economically stable situation, the foreign financial industry has also benefited greatly in recent years from international harmonisation, which is also an advantage for international supervision. The ECB has taken on an important role in this respect and further developed a level-playing field in the euro zone. Schmitten-Walgenbach adds: “In the interest of international financial stability, national recentering and a softening of internationally harmonised financial market regulation should therefore be avoided.”
As the financial centre becomes more international, Zoeller points out the impact on the work of the Association: “We will provide even more information in English and set up English-speaking working groups.” As the international importance of the financial centre grows in the next few years and institutions increasingly choose the place as a starting point for their financial services in other EU states, the association must also address new issues. “So far, we have tended to have an inbound view, but this will change. We will be prepared for this and we are looking forward to it,” summarizes Winter.
The complete speech can be found in the internet at www.vab.de.