-Will Brexit affect German banks?
Germany and the United Kingdom have very strong economic and political relations, and consequently, the U.K.’s decision to abandon (Brexit) the European Union (EU) created a shockwave in Germany. The Brexit decision is likely to impact export-oriented companies as well as German banks and institutions in London.
The branches that Brexit might negatively affect are the automotive, electronics, machinery, chemical industry and among German companies operating in the UK. However, the banking and finance sector remains concerned.
Bundesbank President Jens Weidmann warned that a period of uncertainty could damage German banks and hit growth prospects of the Eurozone’s largest economy.
"Though the association regretted the announcement of a hard Brexit by British Prime Minister Theresa May, the direct impact on German banks would be limited," Michael Kemmer, general manager of the Association of German Banks, said in Frankfurt on Thursday.
“German banks will relocate business to Germany over the next two years; this is already relatively straightforward from a regulatory and organizational point of view,” Kemmer stressed.
The association assumes that London will remain an important financial center, and does not anticipate a complete withdrawal by its member banks.
According to a Reuters report based on experts on the issue, German regulators will meet more than 20 foreign banks on Monday to spell out requirements for moving some operations to Frankfurt, as the city accelerates plans to win over business from London after Brexit.
"BaFin (German Federal Financial Supervisory Authority) wants to give the participants an overview of the main issues for those who want to move businesses to Germany after Brexit," said one of the people involved.