London banks are falling for Frankfurt, according to this German official

Hayley Kirton
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Frankfurt at night
Banks are already talking to Frankfurt about their options, Thomas Steffen said (Source: Getty)

Financial firms are eyeing up their opportunities in Frankfurt following the summer's Brexit vote, an official from Germany's finance ministry has said today.

There have been numerous reports of banks tidying up their contingency planning, as businesses consider whether they need to move some of their operations out of London to make sure they can continue to serve customers after the UK leaves the EU.

Various European cities are now competing for the attentions of firms, and German officials are now noting Frankfurt is a strong contender.

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"I have to say that we at the finance ministry are registering an increasing number of requests," Thomas Steffen, a senior finance ministry official, is reported by Reuters as telling a financial industry conference today. "And we are very, very open to such discussions."

Meanwhile, Thomas Schaefer, the finance minister of the German state of Hesse, where Frankfurt is located, noted the Hesse prime minister, Volker Bouffier, was currently meeting banking top dogs in New York to promote the city.

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However, other industry voices have cast doubt on Frankfurt's optimism. Jon Cunliffe, the Bank of England's deputy governor with responsibility for financial stability, has previously suggested firms are more likely to look to New York as a place to do business post-Brexit, and Frankfurt, Paris and Amsterdam do not pose serious competition.

"What we call London, I can't see that being replicated in the foreseeable future in one place in the European Union," Cunliffe told the House of Lords EU financial affairs committee.

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Meanwhile, David Folkerts-Landau, group chief economist and global head of research at Deutsche Bank, told a conference last month "the net beneficiaries [of bank moves post-Brexit] are going to be the Americans...and not Europe".

Questions still surround what the UK government has in store for the financial services sector in the Brexit negotiations, with many worried neither passporting rights, which essentially allow firms based in the UK to do business in the EU, nor a transition period, which would extend valuable rights for long enough for firms to get their house in order, will be secured.

Anthony Browne, chief executive of the British Bankers' Association, has previously warned that some smaller banks could start moving out of London by this Christmas as lack of clear guidance from government leaves with little option than to plan for the worst.

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