Benoit de Juvigny, France’s leading financial regulator, has said that large international banks are in advanced stages of planning to shift some of their operations from London to Paris as they brace for the impact of Brexit, with some institutions already in the process of incorporating new subsidiaries in Paris. Mr de Juvigny said that whilst some inquiries were still at the informal level, in other cases large international banks have been conducting due diligence and asking practical questions regarding how they will be managed in France. Mr de Juvigny also said that other companies, not just banks, had started to consider Paris as a base for their operations once Britain leaves the EU.
Authorities in other financial centres in Europe have said they would welcome banks moving their operations post-Brexit, including Amsterdam, Luxembourg and Frankfurt. Last week, the deputy governor of the Central Bank of Ireland said that several UK-based financial companies had started the application process to be authorised with a licence in Ireland. UK banks fear that a hard Brexit will result in the UK leaving the single market and, as a result, losing their “passporting” rights, which allow them to sell their financial products freely across the EU. Whilst Mr de Juvigny called the influx of UK companies a “welcome challenge”, he warned it could be a dangerous one should competition between different countries and regulators result in more lenient regulation.