Paris won over Dublin in a lucky dip after a voting run-off produced a tied result on Monday evening. Frankfurt, seen by many as favorite, did not even make it to the final two in the battle to replace London as home to the organization that sets banking rules across the bloc and employs 185 people.
Frankfurt and Paris are at the forefront of the race among European cities to attract London businesses that need an EU hub to continue serving customers in the bloc after Britain leaves in March 2019. Goldman Sachs has said it will make Paris and Frankfurt its European hubs after Brexit.
French Finance Minister Bruno Le Maire said the decision to put the EBA in Paris sent exactly the sort of signal that big banks such as Goldman and Morgan Stanley were waiting for.
"It's a very strong signal, firstly that financial stability will be decided in Paris," Le Maire said on the sidelines of an innovation conference at the Finance Ministry.
"The second signal, which I think is excellent news for Paris, is that Paris will become one of the big European financial centers, if not the biggest. It's also a signal to big international institutions."
Le Maire said the government still had to take several important decisions, notably on labor costs, but that he expected many big banks to come to Paris.
Bagging the EBA marks an unexpected win for the French capital, given that its bid was among the least generous financially.
It is also unusual because it puts two such regulators in one location, joining the European Securities and Markets Authority (ESMA) and prompting some officials to speculate that they could cooperate more closely to exert greater influence.
"Personally, I'm very happy with this decision. Paris was top of my list," said EBA spokeswoman Franca Rosa Congiu.
Though the EBA employs only 185 staff, it plays a core role in turning EU banking law into rules for supervisors to enforce. It also runs the biannual stress test of leading EU lenders.
Financial Services Ireland (FSI), the Ibec group that represents the sector, has described the decision not to locate the European Banking Authority in Dublin as disappointing and unsurprising despite the Government’s best efforts.
FSI Director Marc Coleman said: "Employment in international financial services has grown further since 2015 and with Brexit this is set to accelerate. Locating the EBA in Dublin would have added hundreds of jobs directly in the short term with a significant additional positive indirect impact in the longer term”.
He added that there will be a growing risk of Ireland's interests being sidelined by the EU in financial services if regulatory power is concentrated in larger member states. "As well as costing many new jobs this decision reminds us that a significant number of existing Irish jobs could be in jeopardy if financial regulation favours larger member states" he said. FSI will shortly issue a report showing that employment in the international financial services sector exceeded 40,000 in 2015. (Reuters)
Source: www.businessworld.ie
