The jostling for London’s bankers has begun.

Last week, Paris’s financial elite made the first move, hosting a conference at which they promised to “roll out the red carpet” for City bankers in the event of Brexit. While Frankfurt has yet to follow suit, local officials are confident that if the UK does vote to leave the EU, they can lure its financiers to the city on the banks of the Main.

“Brexit would be bad for Britain, for Germany and for the EU,” says Hubertus Väth from Frankfurt Main Finance, a body that promotes the city as a financial centre. “But if it does happen, then Frankfurt is well placed to benefit.”

Although the UK is outside the single currency area, the City is the world’s principal location for euro-denominated trading, a $2tn-a-day market. Banks are now making contingency plans to shift operations from London to the eurozone if the UK does vote for Brexit, in order to avoid disruption to their euro-business.

Many in the City believe membership of the EU is the reason why the UK has managed to date to foil attempts by the European Central Bank to prohibit clearing houses outside the eurozone from handling the currency.

How much business could move would depend on what economic relationship the UK and EU agreed on after a Brexit. But even a small shift would be a big deal for Frankfurt, according to Mr Väth. “London is 10 times the size of Frankfurt,” he says. “If just 1 per cent of its business comes here, that would be a 10 per cent increase for us.”

One of Frankfurt’s biggest pull factors is the ECB itself. As well as setting monetary policy, the central bank now also supervises the eurozone’s largest banks. This, say local bankers, has cemented Frankfurt’s position as the bloc’s financial hub.

“The ECB is a huge asset,” says Gertrud Traud, chief economist at Helaba, a Frankfurt-based bank. “It’s a good example of how important it is to host institutions. People come and go but institutions stay. The ECB will continue to draw finance to Frankfurt for years to come.”

The numbers suggest the ECB is already helping. Paris remains a bigger financial centre, with 145,400 financial sector workers to Frankfurt’s 62,500, according to a Helaba study. But while the number of finance workers in Paris fell 8 per cent between 2008-2013, in Frankfurt it has stayed flat, which Helaba attributed to the stabilising effect of the ECB.

Frankfurt has other advantages too. It sits at the heart of Europe’s strongest economy, and despite boasting good infrastructure, it is cheaper than Paris, in terms of both living costs and taxes. A recent UBS study found Paris the 20th most expensive city in the world, and Frankfurt the 30th. While Parisian employers had to stump up social security payments worth, on average, 49.6 per cent of the gross wages they pay staff, in Frankfurt the figure was just 19.3 per cent. “These are all areas where Frankfurt can score points,” says Mr Väth.

Frankfurt is also regularly rated among the world’s most liveable cities, even if it cannot match the cultural riches of Paris. This year’s Mercer quality of living survey ranked Frankfurt seventh. Paris was 37th and London 39th.

“People used to say you cry twice when you get sent to Frankfurt. Once when you arrive, and once when you leave,” says a senior German banker. “That has changed. These days it is much easier than 10 years ago to relocate people from London to Frankfurt.”

Yet while Frankfurt’s image may be improving, it also faces challenges. The most serious, says Ms Traud, is the planned merger between the city’s stock exchange and its London rival. “It’s like the sword of Damocles,” she says. “If the merger goes ahead, and the headquarters does end up in London, that would play into Paris’s hands. A financial centre without its own stock exchange is not a financial centre. In that case, I doubt much euro-clearing would come to Frankfurt.”

Frankfurt is also less adept at self-promotion than Paris. “Germany is not set up to promote one city in the way that France is,” says Ulrich Wolff, partner at Linklaters in Frankfurt. “Cities like Frankfurt, Berlin and Munich are rivals.”

That is something Frankfurt must improve on if it is to outcompete Paris, Ms Traud says. “It’s not really the Frankfurt style to advertise itself in the way Paris does. But it’s important to tell people why they should come here. We can’t just leave the field to the others.”

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