It’s been a bad day for French banks’ share prices: BNP Paribas and SocGen’s both fell 5% this morning when Emmanuel Macron opted to call snap parliamentary elections after his alliance was beaten by Marine Le Pen’s far right party in the European parliamentary vote over the weekend. The new elections are tabled for June 30th (round one) and July 7th (round two). But even if Macron’s alliance is trounced, French finance professionals think Paris’s new standing as a financial centre is on solid ground.
Get Morning Coffee ☕ in your inbox. Sign up here.
“Banks’ decisions to locate staff in Paris have already been made, and they weren’t related to France. They were triggered by changes in the British political landscape in the form Brexit,” says one senior French quant. “The reason the American financial institutions chose Paris is because of the lifestyle of senior staff and this hasn’t changed. There is no other city in the EU that’s a financial centre and that’s as attractive as Paris for senior staff.”
Macron said earlier this year that France gained an extra 7,000 financial services jobs between 2017 and 2022. Citi now employs 400 people in Paris, JPMorgan has 900, Bank of America has 750, Goldman has over 400 people there and recently moved Dirk Lievens, its head of EMEA financial institutions banking to the French city. Morgan Stanley said last month that it plans to move an additional 100 jobs to Paris.
As French financial services employment has grown, Macron’s alliance has received plaudits. Ingrid Garin, European head of markets at BNY Mellon said last month that the French government is giving “real support” to firms in France. Last week, Vanessa Holtz, head of Bank of America in Paris, said the bank welcomes the French government’s plans to cap severance payments, which can be as high as year three years’ salary, even for highly paid traders.
Macron himself is in power until the next French presidential election in 2027. However, if he loses the coming parliamentary elections, he could be forced to appoint a prime minister from another party and would have limited authority domestically.
However, one managing director at one US bank in Paris says that even if France ends up with a prime minister from the far right, US banks are unlikely to fall out of love with the city. “Banks don’t seem to have much issue hiring in Italy or Hungary,” he says, adding that some of Marine Le Pen’s policies seem fairly left wing. Even if Jordan Bardella, Marine Le Pen’s deputy, becomes prime minister, most bankers we spoke to said it won’t be that bad for French banking jobs: France will simply become like Meloni’s Italy and Milan is thriving. “Also, see how everyone was scared by Trump and now businesses love him,” says one Paris based senior FIG banker.
If anything, the quant, who proclaims himself an expert on French politics, says a Le Pen parliament is likely to play it very, very safe indeed. “Marine Le Pen’s priority will be to be elected president in 2027. She will know that any missteps will be punished severely by the markets, so she will be as cautious as a central banker until then,” he predicts.
For this reason, he says that as prime minister, Bardella is unlikely to do anything to increase taxes or alter the expat tax allowances beloved of overseas bankers in Paris before 2027. “He probably doesn’t even know they exist. – Voters from Marine Le Pen are primarily interested in emigration from Africa, followed by security.”
One VP at a US bank in Paris observes that the tumult might actually be a good thing: “Banks’ recent lobbying effort to cut severance and get more flexibility over layoffs might be slowed down, and that would be beneficial for us,” he observes.
Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)