Financial Institutions: London or the EU?

On 22 May, we visited Andreas Glänzel at Frankfurt Main Fiance company for a presentation to understand the choice behind locating financial institutions. Many banks were proposed with choosing to be located in Frankfurt and follow the European Union (EU) policies or be based in London.

The EU Central Bank is located in Frankfurt. Any banks interested in performing transactions within the EU countries is required to have a headquarters in the EU's jurisdiction. Each EU region has different policies that the financial institution must abide by. Frankfurt enforces the strictest regulations and higher fees for membership. However, Frankfurt has become the financial capital of Europe with the Central Bank's influence of international affairs and being home to one of the oldest stock exchanges.

The United Kingdom is not part of the EU after the Brexit settlement. Finance for the United Kingdom thrives in London. London presents financial institutions with less barriers-to-entry than Frankfurt. As one of the oldest and famous cities within the world, businesses are able to establish a young corporation and begin developing international connections outside of the EU. Nonetheless, businesses are losing an opportunity to connect with several developed countries.

Overall, financial entities are challenged to envision their future plans and goals. If a company views itself as capable of thriving without being involved in the EU, it maintain a single headquarters in London. Unless, it wants to broad its market and introduce a headquarters in an EU country like Germany. Glänzel's presentation introduces a real example of how finance can effect the entire future of a company and its survival.