Brexit Fallout Hold Your Horses, Frankfurt

A dose of realism for Frankfurt: Despite Brexit, Germany’s largest bank doesn’t believe London will lose its place as Europe’s financial capital just yet.
Don't hold your breath, Frankfurt. London's time hasn't run out just yet.

If there’s been one group that has sensed opportunity in Britain’s exit from the European Union, it’s the German financial capital Frankfurt.

“I am convinced that Frankfurt will profit from a British exit from the E.U.,” Hans-Walter Peters, head of Berenberg bank and president of Germany’s banking association, said last week.

It was one of the most positive German reactions to British Prime Minister Theresa May's plan for what’s been dubbed a “hard Brexit” from the European Union, and in line with a quiet hope that Frankfurt city officials have been harboring for months. There have been some initial successes too, like Goldman Sachs' reported plans to expand its Frankfurt office.

But Deutsche Bank, among Frankfurt’s largest employers, poured cold water on those dreams – or at least urged Frankfurt to keep its hopes in check.

“It’s a little naïve to think that some other European city can replace London as a financial center,” Marcus Schenck, Deutsche Bank’s chief financial officer, said in an interview with the Sunday edition of German newspaper Die Welt. “The City is a microcosm that has been built up over 30 years. It’s not so easy to copy it.”

That wasn’t the only knock to the German financial capital that Deutsche Bank calls home. Mr. Schenck even suggested Frankfurt won’t be the only German city to gain from Britain’s E.U. exit.

“Berlin also has a good chance of becoming a significant financial center,” he said, “simply because it’s highly attractive for young talent.”

Indeed Berlin has been working hard to become something of a hub for startups. That includes budding financial-technology companies that are giving traditional banks a run for their money. In other words, Frankfurt shouldn’t celebrate too soon.