Finance : Paris Financial Center
The PARIS FINANCIAL CENTER could be the main beneficiary from a possible exit of Britain from the European Union (Brexit) in June 2016. It could also profit from a weakening of the City of London due to a possible clampdown on seemingly opaque British offshore financial centers which feed it with lucrative business.
Paris EUROPLACE, an organisation which is in charge of promoting and developing the PARIS FINANCIAL CENTER, points out that the latter has already some considerable assets. In Asset Management, for instance, there are 4 French players among the global top 20 which ranks France as No 2 behind the US (12 players), but in front of the UK (2 players) and Germany and Japan (1 each). (See also Section: Finance: Amundi).
In continental europe's Corporate and Investment Banking, Paris has 4 banks with the largest balance sheets in euros. There is only one bank in Germany that can rival this French dominance.
In the money market, Paris ranks third in size in the world and first in the eurozone for short term marketable debt instruments issued by companies, banks etc. for their short-term financing.
In securities (shares and bonds) custody and transfer, Paris ranks No 1 in Europe. It also carries out 35% of all bond issues in the Eurozone.
Following a successful United Nations Conference on Climate Change in Paris last year, the PARIS FINANCIAL CENTER is positioning itself as a confirmed hub for the issue of green bonds.
A possible move of some international banks from London to Paris would be fair return for France’s elite schools investment in mathematics and financial engineering talents. The latter have up to now been of benefit essentially to the City. In London-based investment banks, 57% of equity derivative quantitative analysts (quants) and 44% of equity derivative traders are French-trained according to a study carried out by Dr Julian Robertson a professor at Singapore University.
The PARIS FINANCIAL CENTER, plays a pivotal role in EURONEXT, a pan-European Stock Exchange which covers France, the Netherlands, Belgium and Portugal. EURONEXT is shaping up to face competition from a possible merger between the London Stock Exchange and Germany’s Deutsche Börse. EURONEXT is a major listing hub in, for example, the Biotech sector, attracting French as well as German and Swiss companies.
In the case of a Brexit, EURONEXT will no doubt be well positioned to recoup substantial business from a London clearing house. The latter, surprisingly, guarantees the clearing and settlement of stock market trading transactions, in euros, even though the UK is not part of the Eurozone.
Sources : www.ipc.com, Ft.com, bfm business, Mathilde Lemoine in Challenges N0474, LESECHOS.FR
Online publishing, May 14th, 2016