Paris success in attracting London banks boosts balance of payments

PARIS (Reuters) – France’s post-Brexit success in attracting banks from London to Paris has exceeded expectations and is increasingly showing up in the country’s balance of payments, the central bank said on Thursday.

After Britain’s 2016 decision to leave the EU, the French government lobbied international banks hard to shift European activities to Paris in the face of competition from other finance hubs on the continent such as Frankfurt, Amsterdam and Dublin.

Those efforts are paying off as a number of Wall Street banks like Bank of America (NYSE:) or JPMorgan (NYSE:) have bulked up in Paris, setting up regional trading hubs in the French capital.

“Paris’ post-Brexit success has been spectacular, it’s recently been picking up and exceeds our expectations,” Bank of France Governor Francois Villeroy de Galhau told journalists as he presented an annual report on France’s balance of payments.

The trend is even showing up in balance of payments data with financial firms relocated from London to Paris contributing 1.5 billion euros ($1.7 billion) to France’s financial services surplus last year, the central bank said.

France-based financial services firms’ transactions with the rest of the world reached a record 10.4 billion euros in 2022 – double what it was at the time of the 2016 Brexit vote – boosted by a broad increase in commissions on securities and currency trading.

Financial services helped push France’s overall services surplus to a record billion euros, also boosted by strong income from tourism and the maritime sector, the latter a result of high shipping rates and France being the home of shipping giant CMA-CGM.

Nonetheless, France recorded a record current account deficit last year of 53.9 billion euros, equivalent to 2% of economic output as the high cost of energy imports offset the services surplus.

($1 = 0.8921 euros)

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