Tomorrow marks the fourth anniversary of the Brexit referendum. The United Kingdom is no longer a member of the European Union, and the dispute over the conditions of withdrawal still drags on and could even be extended.
However, it is now clear that Frankfurt, with the largest financial centre on the continent, is one of the winners of this regrettable development. Around 60 financial institutions have successfully submitted applications to the financial supervisory authority to establish or expand their operations in Frankfurt. Approximately 30 of them will operate their European headquarters from the Financial Centre Frankfurt, including the majority of large US banks, four of the five largest Japanese banks, and two of the four largest British banks.
Thousands of jobs have already been created, and in the coming years, Frankfurt and the surrounding area will experience even more job growth as a result. In addition to job growth, Deutsche Börse‘s market share in euro-denominated derivatives clearing has soared to 18 per cent.
At the time of the Brexit referendum, Frankfurt ranked 18th among the world’s leading financial centres, today it has climbed in the highly competitive top-20 to rank 13th.
Hessian Prime Minister Volker Bouffier (CDU) explains, “I find Brexit hugely regretful I am convinced that it is neither good for the United Kingdom or Europe. However, in Hesse, we are determined to continue taking advantage of the opportunities Brexit presents for our state. The Financial Centre Frankfurt has profited from the UK’s withdrawal and will likely continue to. It is already one of the world’s leading financial centres in the world. We are working to ensure that it remains so.”
“Banks preparing for Brexit invested more than one billion euros in Frankfurt in 2018 and 2019,” tells Frankfurt’s Deputy Mayor and Treasurer Uwe Becker (CDU), who also sits on Frankfurt Main Finance’s executive committee. “You can see this in the city! Among the 100 largest corporate taxpayers in the City of Frankfurt, more than one in eight is a foreign credit institution from abroad.”
Hubertus Väth, Managing Director of Frankfurt Main Finance, says, “By 2019, around 1500 new jobs were already created. When Brexit really comes – we’re not quite there yet – roundabout an additional 2000 new jobs will be added. But, these could be delayed by the coronavirus pandemic. Each of these new positions will create about eight additional jobs in the region. You only see this type of explosive job creation in the high-tech sector. At the time of the Brexit vote, we saw the potential to win 10,000 jobs for the Financial Centre Frankfurt; and the potential was there! Unfortunately, we did not manage to win the European Banking Authority. Nevertheless, the Financial Centre Frankfurt has scored much higher than anyone thought or expected.”
