The European Banking Authority (EBA) has made a decision to move to Paris, France, a relocation that should increase the chances of the city luring London banks once Brexit is complete.
Citing French officials, Reuters reported Paris beat out Dublin, Ireland, in a surprise decision following a voting runoff that resulted in a tie. Frankfurt, Germany, which was the frontrunner, didn’t even make it to the final round.
London has been the home to the EBA, the authority which makes the banking rules for the European Bloc. But, with the U.K. leaving the European Union, the EBA was looking for a new home in a member state. Frankfurt and Paris are in a race to bring London banks and businesses to their cities after the Brexit in March 2019. Goldman Sachs is already making Paris and Frankfurt its European office hubs once Brexit is completed.
According to French Finance Minister Bruno Le Maire, the EBA's Paris relocation sends a message for which Wall Street was likely looking.
“It’s a very strong signal, firstly that financial stability will be decided in Paris,” Le Maire said at 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 expects several big banks to come to Paris once the U.K. leaves the European Union. The France bid for the EBA was the least financially generous, making the decision to relocate there a surprise. What’s more, it places two regulators in one location as the European Securities and Markets Authority is already headquartered there.
“Personally, I‘m very happy with this decision,” said EBA spokeswoman Franca Rosa Congiu. “Paris was top of my list.”