The European Banking Authority is relocate from London to Paris, EU foreign ministers meeting in Brussels last night decided, in what is being seen as a blow to London’s efforts to maintain its position as a financial capital after the UK leaves the European Union.
The European Banking Authority (EBA) works to ensure effective and consistent prudential regulation and supervision across the European banking sector, which it does by assessing risks and vulnerabilities in the EU banking sector, through regular risk assessment reports and EU-wide stress tests.
Last night’s vote will see Paris becoming home to Europe’s two major European institutions, since the European Securities and Markets Authority (ESMA) has been located there since 2011.
Although the EBA has a staff of only around 159, its move to Paris is being seen as a symbolic victory for the French capital, which is one of a number of cities that have been working to entice financial services entities to relocate there from London, in response to the UK’s pending departure from the European Union.
“This is an important decision for the authority that guarantees a seamless continuation of its activities by reassuring its current and future staff over the new location and putting an end to a period of uncertainty,” the EBA said in a statement, following the vote.
“The EBA is confident that France will support the authority to ensure a smooth transition, which is crucial to continue delivering on its mission objectives of maintaining financial stability in the EU and safeguarding the integrity, efficiency and orderly functioning of the banking sector.”
The institution’s employees are expected to move to Paris by 29 March 2019, the date when Brexit is due to come into force.
Choice of venues
In its overtures to the EBA, the French suggested two possible locations, one in the business district of La Défense and the other in the central business district (quartier de la Bourse).
Both were described as offering “the highest possible quality of amenities and services”, would meet the EBA’s requirements in full with respect to size and technical infrastructure, and would be entirely renovated by the start of 2018.
There was also talk of concessions being available on the terms of the EBA’s lease, as well as a promise by the French government to pay a compensation of €1.5m to the EBA, to cover all or part of its lease and fit-out costs.
“The EBA would be in a position to fully run its operations in its new location right from the start of 2019,” the Paris marketing team said in its pitch.
In a separate development, the 27 EU foreign ministers chose Amsterdam as the new base for the European Medicines Agency, which is also due to leave London.