Financial Institutions Looking To Move To Europe post-Brexit

UK BanksPost-Brexit, a number of different financial centres spread in Europe have started handling inquiries from financial firms with regard to the setting of the operations. This information has been revealed by a senior executive from a financial regulatory body in France.

After the United Kingdom being voted out to leave the European Union this June, London might lose its tag and financial hub if the British government pushes for a hard Brexit, as it might result in the loss of access to the companies in the single market of European Union.

The Secretary General of AMF, Benoit de Juvigny has said that the financial market regulator in France has received a number of different informal inquiries from companies that want to shift their base to Paris.

According to the Secretary-General, due diligence exercise has already been commenced by the large international banking firms for setting up a subsidiary unit in Paris.

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Benoit de Juvigny has made the following statement:

In some cases, I would say, we are still at the level of inquiries or informal inquiries by consultants, by lawyers. But in other cases, especially regarding large international banks, it’s normal informal inquiries but they are already taking real due diligence and we’ve received a lot of practical questions regarding the way they are going to be managed, from our perspective, their relationship with the French regulatory.

He has further said that Luxembourg, Frankfurt and Amsterdam were also receiving similar inquiries. He has said that there is no clarity of any kind regarding the progress of discussions on these locations. According to a new report, it is said that the cities being considered are Capital of Malta, Valletta, Madrid, Bratislava, Luxembourg, Amsterdam, Frankfurt and Dublin.

The Secretary-General is of the opinion that he welcomes the new interest in Paris. However, he believes that it could turn out to be a challenging situation because of heavy competition between different countries of the European Union and the regulators of these countries trying to attract these companies. He has warned that the chances of another financial crisis could happen in the near future because the companies would be operating under a lax regulatory system due to stiff competition.

Juvigny has said that the regulatory department of France would be expanding its size because of the inflow of the new companies. The Director General of Defacto, Marie-Celie Guillaume has confirmed about the claims of heightened interests in Paris. She says that the large number of companies with China-based firms, in particular, are looking forward to setting up a base in Europe and are making enquiries in Paris.

Marie-Celie Guillaume further says that the companies would have favoured London instead of Paris prior to Brexit. With UK’s planned exit from EU, companies now prefer other European cities.

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