City exodus to Paris not certain despite HSBC 1,000 jobs relocation reports
The bid by Paris to lure London-based banks and investment firms to its financial district is by “no means certain” to succeed, according to an international finance centre expert, despite reports of HSBC moving 1,000 jobs to the region, following last week’s landmark Brexit vote.
In a statement following the UK’s decision to withdraw from the European Union, the Paris financial marketplace – Paris Europlace (pictured), called for a ‘very strong response’ from the EU as it hopes to benefit from any firms looking to relocate financial business from London to a new EU base.
The Paris Europlace Committee, chaired by Christian Noyer, former governor of the Banque de France, met on Friday to evaluate the consequences of Brexit for the district as well as Europe and France generally.
It called for “fresh momentum” into the Eurozone and to “take back control of the clearing system infrastructure”, which, it stated, “cannot be located outside the Eurozone, particularly for reasons of risk management and currency stability”.
‘Very strong response’
Gérard Mestrallet, chairman of Paris Europlace, said: “We need a very strong response from the European Union, and not only with respect to the United Kingdom. The aim now must be to relaunch a more tightly unified and attractive Europe in a global world.”
And with HSBC becoming the first major finance firm that has been widely-reported to begin relocating around 1,000 members of staff to Paris, the French capital’s finance centre believes that it could be best placed to benefit, if firms decide to move European operations from London.
HSBC has yet to confirm its decision, but the BBC reported on its website, that sources close to HSBC said that the move had already begun.
However, Mark Yeandle, associate director at the Y/Zen Group, a firm that specialises in dealing with global financial centres, said that he feels that not too much should be read into HSBC’s potential relocation.
HSBC ‘not reflective’
“The fact that they are international firm [looking to relocate to Paris] rather than, say a French firm, could be seen by some as cause for concern,” said Yeandle. “But it is by no means certain to succeed. What HSBC does is not reflective of what others will do in my opinion.
“First, they are huge international firm that can move staff very easily but more importantly, other firms remain sceptical about what Paris and France can offer them. Noises coming out of the Élysée Palace in recent times have been rather derogatory towards financial firms.
“They might be trying to backtrack with these new initiatives but there are plenty of concerns about suitability,” he said.
US firms ‘happy to remain’ in London
Yeandle agreed that there could be a form of exodus from the City, but insisted that panic stations should not be manned just yet as, he believes, many US firms are “happy to remain” in London.
“Already a number have come out and backed remaining in London,” he said. “And I think more will follow. There are other factors other than political, for example, the fact that US and UK are native English speaking.”
The French capital’s Paris Europlace financial centre has been increasing its profile in recent months, as it bids to leapfrog German rival Frankfurt as a new European alternative for financial firms and banks. The centre, despite initially publicly calling for a UK Remain vote, has also, as reported previously, been positioning itself to benefit from any Brexit vote.
Paris Europlace, recently showcased an event held on May 30 dubbed: “Place financière de Paris 2020”. It was chaired by Michel Sapin, minister of finance and public accounts, and co-hosted by the French Treasury department, where it highlighted: “the advantages of the Paris marketplace, with the aim of serving the economy”.