Frankfurter Rundschau online, 31 January 2002

London remains Number One Financial centre Frankfurt only the gateway to the German market

By Detlev Fechtner

 

In the view of decision-makers from major banks, accounting firms and advertising agencies, Frankfurt cannot compete with the City of London as a financial centre. This at least is the conclusion of a joint study by the Universities of Heidelberg and Loughborough.

FRANKFURT. When there is boardroom talk of the world's most important financial centres, London is mentioned in the same breath as New York. Its preeminent position in Europe "is very substantially based on the available pool of knowledge and the density of institutions in the City", explain the directors of the research project in economic geography, Michael Hoyler and Kathryn Paine. Given that London is home not only to the banks and brokers but also to the government and professional associations, the City of London represents something of a hub -- unmatched in Germany.

The British capital is also more strongly tied in to worldwide networks. Frankfurt is seen as having more of a "European orientation" by the managers interviewed and as being a gateway to the German market.

Not even the introduction of the euro had any effect on relative rankings, the researchers conclude from their interviews with board members and MDs. The location of the European Central Bank in Frankfurt am Main was good for Frankfurt's image but "for the vast majority of companies had little or no practical relevance". London's position was "not threatened" by Britain's continuing commitment to the pound.

At the same time, the researchers warn against understanding the competition between the two financial centres as a zero-sum game. "The strengthening of one location need not necessarily be at the expense of the other", emphasises Hoyler.

Cross-border cooperation between major law offices and the like may well strengthen the home base: "The research project shows that the relationship commonly characterised as rivalry between Frankfurt and London cannot be reduced to a matter of competition."

 

 

© 2002 Frankfurter Rundschau