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June 2016

The Paris financial centre : focusing on our ambitions

In the competition among financial markets, Paris ranks as an ambitious challenger. The many existing attractions of our financial centre have recently been bolstered by the Paris area local authorities who have rallied to its support. Paris now needs to further boost its appeal. To do this, we need the French government's commitment and a strong signal on tax.

A financial centre plays a key role in stimulating an economy, whether by generating jobs, directly and indirectly, channelling savings into investment or offering professional opportunities to people of talent. London is a striking example...So what does Paris have to offer? First, the raw materials: a substantial bedrock of savings. French households save 16% of their income and the French investment management industry is worth 3.6 trillion euros. Second, the quality of French financial training is admired around the world and naturally our eco-system encourages innovation, as shown by the emergence and expansion of numerous Fintechs. Appropriate infrastructure and nearly fully renovated, for office space and public infrastructure (transport, schools...). Finally, and this is the trump card, Paris has some of the leading players in the financial industry, in banking, insurance and asset management who play a key role, as well as efficient market infrastructure. Euronext is the biggest equity market in the euro zone.

We need major players for ambitious financing. A message that is now well understood by the regional authorities. The Ile de France region, along with the Hauts de Seine department and the City of Paris have just confirmed their total commitment at the "Paris Welcome to Europe" conference on 8 June to bolstering the appeal of Paris as a financial centre in their areas of responsibility: training, infrastructure, property, etc. It's a major change.

So what do we need for a decisive breakthrough? First and foremost, a clear signal from the government on its interest in this industrial cluster and more specifically regarding tax. The competitive disadvantage is such that Paris today would only be ranked 5th as a "fallback position" in Europe for the financial sector in the event of Brexit. This is dramatic and such a shame. The Paris market needs a tax framework that is favourable, stable and competitive. The tax on wages is economic nonsense. When it comes to attracting business. An initial step, which would be simple and quick to implement, would be to improve the system for "non-domiciled" employees, or at least bring in line its duration to that of the UK system. We need to inject confidence and incentivise companies thinking of making Paris their European decision centre. This is a critical issue.

Marie-Anne Barbat-Layani
Chief Executive Officer of the French Banking Federation

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Our Positions

CIB, its biggest fans are its customers
Corporate and investment banking or CIB plays a core role in financing the economy. However, its role is little understood. Clearly, there is a need for some education here. This is why the French Banking Federation has made a film that gives straight answers to a simple question: what is the point of CIB? The film is led by four companies, from different sectors and of different sizes, and one local authority, all of whom speak about the solutions that their banks offer them. The clients are the biggest advocates of CIB, explaining how they helps them develop their business safely, invest sustainably or protect themselves against the risks of fluctuating currencies. A reality that is a long way from the caricatures...

Link to the film

Basel IV: German and French banks on the same wavelength
Concern is mounting in the banking world about the work of the Basel Committee on rate, credit and operational risk weightings. Although the Committee said at the start of the year that any new capital requirements on banks would not be "significant" early studies by some banking sectors are considerably less optimistic. German banks estimate a 30% impact on their risks and hence capital. Given the potentially catastrophic crunch this would mean for the financing of the economy, growth and employment, the FBF and Germany's banks association have decided to join forces. On 21 June, representatives of the two trade associations will meet Michel Sapin, the French Finance Minister, to warn about the consequences of Basel IV for the European economy.

Professional classifications, why the banks want to keep them
The work on regrouping the professional branches is a concern for French banks who want to keep their professional branches. The French banking sector is marked by the diversity of its organisations and the rich dialogue between companies and employees. This is conducted within five official professional classifications each of which includes tens of thousands of employees. These professions are not simply there for historical reasons. They play a full role in social dialogue and progress. It is in everyone's interest, companies and employees alike, to preserve them. "If it ain't broken, don't fix it".

In their own words

Benoît Cœuré, member of the ECB board on France 24
06/08/2016
We are convinced that it is both in the interest of the UK to remain in the European Union and in the Union’s interest to keep the UK as a member. The EU is a source of strength and we will all be stronger, including the British, if they stay.

FBF in the media

Le Monde

5/20/2016

Europe favours the relaxation of banking regulation

The debate on bank regulation is gaining momentum. The daily Le Monde was interested in this topic which is not only technical but likely to haveserious consequences on the financing of the economy in Europe. "[Financial] Institutions have long believed that the excess of prudential rules undermines their model and hinders the loan growth" recalls Le Monde. When questioned, Marie-Anne Barbat-Layani stated that" German banks assessed, in a large group, that regulations that are still in the Basel Committee’s pipeline, if applied, would lower their profitability from 8.8% 2%. No economic sector can live with such weak profitability".


Wansquare

6/3/2016

Basel Committee: political grip needed

After Basel III, will it be straight onto the next round of banking regulation, with work starting on Basel IV? Nothing could be more perilous for the financing of Europe’s economy. As Marie-Anne Barbat-Layani stresses in an article for news website Wansquare, “it is essential that we quickly put in place a political vision on these regulatory issues given what is at stake for the European economy. The key point is to have a coherent approach that marries the aims of ECB monetary policy and the decisions taken by the single supervisor and Basel Committee.” The Committee is currently looking at how banks weight their various risks (credit, market, operating and rate risks). It is fundamental for growth and jobs that any capital requirements are correctly calibrated and do not impair banks’ ability to finance the economy.


Financial Times

6/9/2016

Paris woos bankers threatened by Brexit

The attractions of the Paris Financial Market were on show in the Financial Times of June 9. Two weeks before the referendum on Britain’s future in the European Union, the French office of the British business daily surveyed the various institutions pushing the Paris Market and its many advantages. The head of the FBF emphasised that Paris needed to send a positive signal on tax to those wanting to move their decision-making headquarters to the French capital.


Agenda

June
17

Informal ECOFIN meeting - Brussels

June
20

AMF debate: "Financial education in the digital age, what will it mean for savings?"

June
22

FBF/AFTI meeting: "MIFID2/MIFIR: Are delays good or bad news?"

July
1 - 3

Aix-en-Provence Economic Forum, panelist Marie-Anne Barbat-Layani

July
5

23rd International Financial Forum at Paris Europlace

July
8

Meeting on "Banks and districts" with Marie-Anne Barbat-Layani in Amiens

Tweet of the month

Figure of the month

M-A Barbat-Layani "#Banks and #Fintech must work together. It is in their mutual interest" @Pole_FIN_INNOV
@FBFFrance

5.2%: Annual growth rate of credit for consumption to households keeps increasing in March 2016