By Francis Buchanan
In light of Britain’s Brexit saga, a number of high-profile European cities are competing to become the continent’s leading financial centre. At the head of the pack, the German city of Frankfurt is trying to attract as many London-based financial firms as possible. So, why has the city emerged as a likely relocation destination for financial firms and how did it come to prominence in the first place?
Business in Frankfurt
Home to over 150 international banks and a host of national banks such as German Bundesbank and the European Central Bank, Frankfurt is already one of the world’s most significant financial centres. Ranked 8th in the International Financial Centers Development Index, the city’s prominence has even earned it the snappy nickname, Bankfurt.
The city accommodates around 9,000 financial service providers and is also home to The Frankfurt Stock Exchange, which is one of the largest trading platforms in the world. Emerging hybrid sectors, such as the lucrative FinTech industry, are also booming while the insurance sector is proudly represented by the European Insurance and Occupational Pensions Authority (EIOPA).
Frankfurt is a hotspot for chemical and pharmaceutical companies and the logistics and transport services industry is believed to be responsible for the most jobs in the region. The Frankfurt Book Fair, held every October, also holds the mantle for being the largest book fair in the world.
Away from industry in the region, Frankfurt is one of Germany’s most popular hubs of tourism – a detail perfectly reflected by the lauded reputation of the city’s international airport.
Why is Frankfurt a Financial Centre?
So, it’s clearly a busy centre of industry, but why is Frankfurt the financial capital of Germany?
The truth is, ever since the 12th century, Frankfurt has always been an important trading hub in continental Europe. However, it wasn’t until the wake of the Second World War that Frankfurt really became a world player. This was in large part due to the establishment of the Deutsche Bundesbank in Frankfurt during the late 50s.
This was then followed 40 years later by the decision from the EU to establish the European Central Bank (ECB) in Frankfurt’s financial district. Both of these decisions would prove to bolster Frankfurt’s industrial identity forever.
Will Frankfurt Overtake London?
For those keeping a sharp eye on Britain’s Brexit bind, it’d be impossible not to notice that Frankfurt has been hogging the headlines of late. It’s no secret that the city is poised to try and attract as much business as possible from London, but whether this will actually come to pass is yet to be properly evidenced.
Yet, as the world’s financial capital, London still holds large amounts of sway in today’s financial landscape. The UK capital employs around 700,000 employees in the financial sector while Frankfurt only employs 70,000, a tiny fraction of the former figure.
Some headlines suggest that London is set to lose a figure close to around €800bn to Frankfurt as preparations for Brexit continue, while others suggest that a “Brexodus” has already begun and around 40 financial firms have already relocated to the German city.
According to Will Martin from the Business Insider, Managing Director of Frankfurt Main Finance of Hubertus Vaeth commentated:
“We want to send the message loud and clear: ‘Welcome to Frankfurt. How can we help you?’ The welcome banner is hung and Frankfurt’s doors are wide open.”
Will Frankfurt benefit from Brexit?
Frankfurt will undoubtedly benefit from Brexit uncertainty, with many financial firms favouring the stability of the future over the insecurity of the present. It is already believed that there will be between 2,500 and 15,000 new jobs in EU financial hubs due to Brexit, with around 5,000 of those jobs being in Frankfurt. Furthermore, a total of 25 new skyscrapers are currently under construction to cater to this vast influx of new business.
Yet, Frankfurt isn’t the only European financial hub looking to benefit from Brexit. Paris, Amsterdam and Luxembourg City are all looking to capitalise on want-away London-based firms and Madrid and Milan are also looking to get in on the action.
Relocating to Frankfurt
With a rewarding work-hard-play-hard culture and an array of things to see and do, Frankfurt is a city that has a lot to offer anyone thinking of relocating there. As relocation and global mobility experts, here at SilverDoor Apartments, we pride ourselves on our knowledge of the industry and our ability to facilitate business travel around the globe.
Perfect for long or short stays, our portfolio of Frankfurt-based serviced accommodation is as diverse as it is cost-effective. We also offer a huge range of apartments in London for anyone heading in the opposite direction.