
Paris Eyes Luring 20K Bankers from London Amid Brexit Rupture - JumpCrisscross
https://www.bloomberg.com/news/articles/2017-01-03/paris-eyes-luring-20-000-bankers-from-london-amid-brexit-rupture?cmpid=BBD010317_BIZ
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stock_toaster
Doesn't France have fairly strong labor laws and high taxes? I recall not long
ago seeing headlines about "the rich fleeing France".

I wouldn't think that would be a big draw for finance types, especially when
there are other markets in the EU that seem like they would be more tax
friendly (Ireland, Luxembourg, Switzerland, Frankfurt), while still being
close enough to other centers of power.

~~~
adventured
Zero chance Paris pulls a large percentage of these bankers. They do have a
lot of bad labor laws and quite high taxes, both of which have contributed to
France having a very stagnant economy (both in terms of innovation and growth)
for decades. In real terms their economy hasn't expanded in nearly 25 years.
The centers of power in Europe are still by far in Germany and the UK. French
voters have noticed the problem, which is why their Socialist leader recently
had a 4% approval rating and the far-right is making big gains. The same
disastrous policies that have left them with a broken economy, will keep the
London bankers away. There are half a dozen other major cities that will get a
look before Paris.

Not to mention, France is increasingly an outlier in Europe with a punishing
corporate income tax rate (33%). Most of their European competitors have been
slashing that rate the past decade plus: Netherlands 25%, Spain 25%, Austria
25%, Sweden 22%, Denmark 22%, Portugal 21%, Finland 20%, UK 20%, Iceland 20%,
Czech 19%, Poland 19%, Switzerland 17.9%, Ireland 12.5%. The average across
Europe is about 20%. Why would an international bank want to be there, except
for local French business purposes?

~~~
vidarh
France _has_ a large percentage of EU bankers already.

Only Frankfurt and London are at a similar level as Paris in the EU for
banking today, and if London ceases to be a viable alternative (due to
passporting etc. post brexit), then Paris will end up taking a lot of that
business for the simple reason labour laws and taxes are not the only things
the banks need to care about, but also where their employees are willing to
live and work.

My ex works in HR at executive level at a major investment bank. French labour
laws etc. never comes up when they consider where to staff up/down (and they
do _continuously_ ). As for corporate taxes, no investment bank has a problem
finding schemes to shift profits around.

> They do have a lot of bad labor laws and quite high taxes, both of which
> have contributed to France having a very stagnant economy (both in terms of
> innovation and growth) for decades.

Their GDP per capita is largely moving in lockstep with the UK and Germany,
despite far fewer hours worked per year for the average French worker. As it
turns out there's very little evidence that these "bad labour laws and quit
high taxes" have much impact on growth.

> Not to mention, France is increasingly an outlier in Europe with a punishing
> corporate income tax rate (33%).

In line with Germany.

> The average across Europe is about 20%. Why would an international bank want
> to be there, except for local French business purposes?

They are already there for purposes other than "local French business
purposes". Many international banks have similar numbers of staff in Paris as
in London.

~~~
JPLeRouzic
>> Not to mention, France is increasingly an outlier in Europe with a
punishing corporate income tax rate (33%).

> In line with Germany.

The problem in France is not corporate income tax, as some huge companies do
not pay that tax with creative but perfectly legal accounting. The problems
are with the "taxe professionelle" which is not based on revenues and the
taxes on labour. If some employee receives 2000 euros, usually the company has
to provision 3000 to 4000 euros. Most of those labor taxes go to the social
security organism which has a budget as large as the state budget. (Edited for
grammar and clarity)

~~~
Totoradio
> The problems are with the "taxe professionelle" which is not based on
> revenues and the taxes on labour.

The "Taxe professionnelle" was abandoned in 2010/2011.

~~~
JPLeRouzic
True, it was abandoned, and replaced by "Contribution économique territoriale"
which is more or less the same thing.

[https://fr.wikipedia.org/wiki/Contribution_%C3%A9conomique_t...](https://fr.wikipedia.org/wiki/Contribution_%C3%A9conomique_territoriale)

------
Roritharr
The Frankfurt Correspondent for the Magazin "Capital": "Hey we have to do
something, Frankfurt is in the news with their 10000 Bankers!" "Let's just say
20000 to Paris."
[https://twitter.com/kirchnerchris/status/816196993517289472](https://twitter.com/kirchnerchris/status/816196993517289472)

Which kinda summarizes the facts this is based upon.

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hardlianotion
I have no particular insight into what banks are planning for their staff, but
this reads rather like an infomercial from a pressure group.

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HalfwayToDice
Meanwhile, in the real world, bankers aren't moving from London. More Brexit
hysterical fake news. Expect much more of this in 2017.

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anothermouse
20K bankers to shortly find themselves working in a regional office and
wishing they could relocate back.

Passporting doesn't require moving your employees wholesale, you just setup a
subsidiary within Europe and trade with that legal entity for European trades.
A skeleton office is all that is required.

~~~
tim333
I was thinking that. Nearly all the big banks must have European branches
already and presumably someone at Barclays London can log into the systems of
Barclays Paris and do a trade there for instance if it has to be done that
way.

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zhte415
Given most of global trading in London is USD debt anway, can't happen, won't
happen, Thinking in London, doing in Dublin, the manual part that is necessary
anyway today.

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Animats
Are all those "bankers" really necessary? The business London is losing can
probably be done with far fewer people.

~~~
tkyjonathan
Well, those X,000 bankers pay their taxes (to some degree), pay rent, buy food
in restaurants.. So their absence is disruptive to the local economy,
considering how much money their earned.

~~~
Chris2048
This sound like the glass-makers fallacy. To really evaluate this kind of
thing you need to see the entire economic chain.

------
donmatito
Comments by people in the English banking ecosystem: France is completely
delusional about being able to attract English financial ecosystem. They are
only hesitating between Amsterdam and Frankfurt.

~~~
JumpCrisscross
> _They are only hesitating between Amsterdam and Frankfurt_

At least in private equity and the related leveraged loan, structured product
and similar work, New York is taking the lion's share of formerly British
bankers' business.

~~~
dx034
In relation to Brexit? I don't think so. It will be much harder for most
employees to move to NYC (visa) than Paris/Dublin/Amsterdam/Frankfurt. Also,
apart from the Americans that are working here, convincing people to move 500
miles is much easier than to the US.

Banks operating in both countries can of course gradually shift more work
towards the NYC office, but I don't think that many companies are looking to
relocate whole departments there.

~~~
JumpCrisscross
> _relocate whole departments there_

That's not what's happening. The top performers are moved, middle- and low-
level staff in London released and new staff hired in New York. A handful of
middle managers may be moved or hired in Paris or Frankfurt or Amsterdam, as a
conduit, too.

Clients are also shifting. The amount of first-time business I am personally
seeing from new European clients, who need a considerable amount of help
adapting to New York's more direct banking culture, has us hiring frenetically
(though locally).

~~~
dx034
Exactly, but even for well performing front-office staff it will not be easy
to get a visa for everyone. Moving within Europe is easy as there's no visa
process (right to work in the EU is already given).

I don't doubt that NYC will profit from Brexit, but I think it's more in an
indirect way (as you describe) and the generally better economic environment
in the US at the moment, not through relocation.

As a side note, some banks use the Brexit discussion to move back office
functions to Eastern Europe, hoping that they can sell it as a Brexit
consequence and not as offshoring.

~~~
riffraff
> Moving within Europe is easy as there's no visa process (right to work in
> the EU is already given).

well, that would be conditional on Brexit, right?

~~~
renaudg
For British workers yes, but a large portion of London bankers are EU
citizens.

------
gaza79
With google, facebook and apple all expanding in the U.K. are they hoping to
collect the developers that are left out in the cold? Anyway this has all been
mentioned before back in 2011 after the government went on a witch hunt in the
U.K. but all the talk of moving amounted to nothing mainly due to the cultural
difference that exist outside of London.
[http://www.londonlovesbusiness.com/business-
news/finance/bou...](http://www.londonlovesbusiness.com/business-
news/finance/bouncing-back-how-londons-hedge-fund-scene-survived-the-
crisis/314.article)

------
known
Globalization is Zero-sum

~~~
simonh
Un-coerced free trade is never zero-sum. If I choose to buy goods from you,
it's because I value the goods more than the money I pay, and you value the
money I pay more than the goods. Both of us are better off after the
transaction.

Arguments about foreigners taking our jobs are obverblown. Take Britain as an
example. Through tour historic trade networks, commonwealth links and EU
membership we a major free trade powerhouse. So have all our jobs gone to
China? No, our unemployment rate is near historic lows and our employment rate
- the percentage of the population in work - is the highest it's ever been
since it started being tracked in 1972. Compared to what life was like in my
childhood in the 70s most Britains are fantastically better off. Our city
centers and public facilities have been transformed. Foreign travel for
leisure, once the preserve of the wealthy, is within reach of most of the
population. My wife in Chinese, I've been going there since 2001 and that
country is almost unrecognizably better off thanks to Globalization.

I've seen both sides of the globalization equation up close. It's the most
powerful force for good the world has even seen, flooding our markets with
cheap consumer goods and low cost luxuries (I'd never seen a Mango in my
childhood, now you can buy a box of them for £2 in the London markets in
season) while lifting millions of people out of grinding, abject poverty.

~~~
pikzen
>If I choose to buy goods from you, it's because I value the goods more than
the money I pay, and you value the money I pay more than the goods.

Uh... No? If I pay you, it's because you have something I need. I'm not giving
you that money because I think it has less worth than what you're giving me in
exchange, I'm doing it because that's the price.

As far as UK unemployment goes, a huge part of that low percentage is due to
zero hours jobs. Just because people are not registered as seeking a job
doesn't mean they're better off. It's exact same scheme as Germany, and while
unemployment goes down, the percentage of people with a job yet under the
poverty line grows almost proportionally.

~~~
simonh
>Uh... No? If I pay you, it's because you have something I need.

So you value it more. It has more utility to you. You are better off with it
than with the money.

~~~
Chris2048
Unless it is tied into some kind of mandatory tax, or government subsidy.

~~~
bdhess
I find utility in staying out of jail, so I pay my mandatory taxes.

~~~
Chris2048
Exactly :-)

If the government can "manufacture" utility like this, it isn't utility.

~~~
simonh
Therefore government services have no value?

Driven or been driven on any roads lately? Bought any goods transported on
public infrastructure? Etc. I'm lost. I've no idea what you're really arguing
at this point.

~~~
Chris2048
I don't think I argued that. Perhaps that's why you're confused.

