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| Hmm...with London out of the picture, I love Paris in the summer... |
With the non-London English and Welsh effectively taking the UK out of the EU, London's place as a banking center--at the very least an EU banking center--has been thrown into question. With big things afoot, where will London bankers and others now decamp that's truly European? The two early contenders are two cities which London actually vanquished in the 80s and 90s--Frankfurt, Germany and Paris, France. That said, those relocating from London will probably need to get used to a
lower standard of living:
London-based bankers considering a possible relocation if Britain votes out of the European Union would suffer pay cuts of up to 80 percent if they were to move to Frankfurt or Paris, data from salary-benchmarking site Emolument showed. Analyzing 8,065 salaries for front-office banking roles in London, Frankfurt and Paris, Emolument found that London bankers earned higher salaries than their German or French peers, from entry-level analyst jobs right up to coveted managing director positions.
That said, lower wages are partly offset by lower costs of living on the continent:
London-based associates earned 100,000 pounds ($146,570) on average, compared with 71,000 pounds and 70,000 pounds for their contemporaries in Frankfurt and Paris respectively, while directors earned 280,000 pounds - 98,000 pounds more than peers in Frankfurt and 114,000 pounds more than Paris-based directors.
Despite the broad pay gaps, Emolument said some bankers could be financially better off if they moved to Frankfurt, where the cost of living is 60 percent lower than in London. In Paris, however, a 35 percent reduction in living costs compared to London would not fully offset the steep pay cuts a move to the French capital would entail.
"Until now, prestigious banking jobs were usually to be found in London; an attractive set of opportunities on the continent could however give London bankers cause to leave the UK," said Alice Leguay, Co-Founder & COO at Emolument.com. If Britain does vote to leave the EU in a referendum on Thursday, sources at some banks including JPMorgan, Morgan Stanley and HSBC have indicated they could be forced to move front office and trading activities to continental offices.
I am certain that, in the aftermath of this vote, many bankers will not want to leave London. However, they have no choice now.
