One of London’s Top Rivals Explains How to Score a Brexit Boost


The U.K.’s departure from the European Union has gifted the City of London’s European rivals with a once-in-a-generation opportunity to win back some of the business that has gravitated towards the Square Mile over the past few decades.

Hundreds of billions of dollars in assets and thousands of jobs have shifted to cities such as Paris, Frankfurt, Dublin and Amsterdam, and they are jockeying for more in the coming years. Another beneficiary: the tiny, landlocked country of Luxembourg, sandwiched between Germany, France and Belgium.

One of London’s Top Rivals Explains How to Score a Brexit Boost

Its population of about 625,000 makes it one of the smallest members of the EU, but its financial services industry is among the biggest, dominating areas such as bond listings and investment fund structuring.

The Grand Duchy has attracted companies ranging from insurers to asset managers to banks in the years since the U.K. voted to leave the EU, with 95 of the 441 firms moving business to the bloc selecting Luxembourg, according to an April report by New Financial, a London-based think tank. That compares to 135 firms plumping for Dublin, 102 for Paris and 63 for Frankfurt, although the ranking isn’t reflective of the size of business moved.

The head of the country’s financial lobby group, Nicolas Mackel, talks about Luxembourg’s Brexit strategy and his take on how London’s rival financial centers can best take advantage of Brexit.

His comments have been edited and condensed.

How can countries take market share from the U.K.?

First of all, you will need to focus on your core strength. In the case of Luxembourg the ecosystem we have built up over the last 40 years.

The second is basically substance over gimmicks. Financial institutions are interested in structural factors, not short-term initiatives.

The third factor is if you want to attract the international financial community: well, speak their language. In Luxembourg, you have a population that not only speaks French and German equally well but serves everybody in English if they want.

How important are other factors in attracting financial firms?

One of the structural factors that played well was the presence of international schools. These are the things that people look at, not nicely phrased campaigns. I have seen many of these spreadsheets of different firms that were drawn up by their advisers or consultants or lawyers, and they compare cities on, not three or four, not even 10, but 30, 40, 50 criteria.

Tax is, for everybody, a factor. But definitely not a determining factor because if it were I think everybody would have camped off to Dublin.

Can wining and dining Wall Street executives help?

It certainly helps if the CEO of Goldman Sachs strikes up a relationship with the French president. I mean, that certainly helps the decision-making, but it’s not necessarily what makes the whole operation go to Paris.

Let’s take the case of JPMorgan. It moved some activities to Frankfurt, other activities to Paris, other activities to Luxembourg, other activities to Dublin. And how did they choose? Well, they relocated this activity to where it made most sense, not to where they were best received.

We don’t have a Versailles, and nothing even coming close to it. We have a medieval castle, but we have not invited the Blankfeins and Jamie Dimons to come to Luxembourg. We’ve taken a business-like attitude, where we talk to all these financial institutions and ask them, ‘How can we help?’

What has been your approach to pitching for business?

You have a number of countries: France, Italy, Spain that have adopted special Brexit regimes, whether they are over tax, the nature of immigration, this or that. For Luxembourg, there was no justification to let the Brexit refugees jump the queue or get special treatment.

Luxembourg may of course be a smaller country than France or than Germany, but I think that is irrelevant. Our market is not our domestic market, it is the EU single market. If you’re a larger country, you are more focused on your domestic market. We don’t have a domestic market that we focus on. So we have always, always in our history, focused on the international market. Because we are small, we are open by necessity.

What is the main attraction of Luxembourg?

Luxembourg is the safest bet. If I had to boil our arguments down, Luxembourg is very reassuring. The country offers a place where you know that 10, 20 years from now, things will not have changed 25 times from left to right and from up to down. There is zero chance of a Lexit vote.

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