Finance Minister Altmaier & Hesse Prime Minister Bouffier meet in Brussels to discuss future of EU financial markets after Brexit

The Federal Government and the Hesse State Government are convinced that the financial hub of Frankfurt will take on a more prominent role after Brexit based on its outstanding qualities. At the same time, they emphasise that Frankfurt should be the home of the relocated European Banking Authority after the United Kingdom has left the European Union. Hesse Prime Minister Volker Bouffier joined Federal Minister of Finance Peter Altmaier, and the special representative for the EBA bid, former Federal Finance Minister Dr. Theo Waigel, in Brussels on Tuesday to present the German bid to host the European Banking Authority.

“Frankfurt is the main financial hub on the Continent and it is only logical to have the European supervision where most of the trading and exchanges actually takes place,” said the Hesse Prime Minister at the event held at the Representation of the State of Hesse. “I deeply regret Brexit, and I am convinced that it is neither a positive development for the United Kingdom nor for Europe. We are determined however to use the opportunities which do arise for the benefit of our country.”

The European financial market will be completely reshaped by Brexit, explained Peter Altmaier, Federal Minister of Finance and head of the Chancellor’s Office. For example, banks are required to have established offices in the European Union, if they want to be able to offer their products in the European Union. They are therefore currently looking for the ideal location to establish such subsidiaries. The Frankfurt bid to host the EBA signals our clear intent to other EU Member States that we are focused on planning for the future and that stability will be our watchword.

“Frankfurt offers outstanding infrastructure in the heart of Europe, an unrivalled network linking all the key players in the financial world, and an internationally-oriented environment,” stressed Bouffier. This includes international schools, 34 universities within 1 hour’s drive and 100,000 people working in the finance industry who bring a wealth of expertise to the table. “This is the ideal basis on which to relocate international authorities such as the EBA quickly and seamlessly, and to hit the ground running immediately. Any argument based on the facts and on industry requirements clearly points to Frankfurt as the ideal location,” said the Prime Minister.

“The financial markets are traditionally very sensitive to change, and Brexit is a change of quite epic proportions. It is therefore all the more important that we ensure stability and reliability for Europe in this vital sector by relocating the European Banking Authority to Frankfurt,” said former Federal Minister of Finance Dr. Theo Waigel, who is supporting the German EBA bid as a special representative. “Looking at it objectively, Frankfurt is the most suitable location for the European Banking Authority, because it links the body to the European Central Bank and the insurance regulatory authority, EIOPA, both geographically and with regard to personnel, and will therefore allow the close collaboration which will be absolutely crucial to the future of this sector.”

“In our view, Frankfurt is the logical location for the European Banking Authority,” said Hesse Minister for European Affairs, Lucia Puttrich. This opinion is often repeated in meetings with representatives of other Member States. Nevertheless, Frankfurt’s bid is by no means a foregone conclusion, as political considerations may also play a role in addition to purely technical criteria when the decision is taken on 20 November.

Alongside many other benefits however, the relocation of the EBA to Frankfurt also provides an opportunity to improve efficiency and increase political clout, since much of the EBA’s remit overlaps with that of the European Central Bank, the single EU banking supervisory mechanism SSM, the European insurance supervisory authority, EIOPA, and other European financial institutions. Deutsche Bundesbank and the Federal Financial Supervisory Authority also have their headquarters in Frankfurt.

“The State Government and all relevant partners in Frankfurt and the Rhine-Main region have a shared vision and are working together closely on the Brexit issue,” said Puttrich. Frankfurt is set to benefit from Brexit. A number of banks and other financial institutions have already announced plans to relocate there, or to expand their existing operations. Others seem sure to follow. “We are therefore planning for the future positively and with confidence.”

Background

Following Brexit, the European Banking Authority (EBA) will have to relocate within the European Union. Alongside the Frankfurt bid, there are a further 7 bids from other EU Member States. The decision regarding the future EBA location is due on 20 November.