Only Frankfurt and London are at a similar level as Paris in the EU for banking today, and if London ceases to be a viable alternative (due to passporting etc. post brexit), then Paris will end up taking a lot of that business for the simple reason labour laws and taxes are not the only things the banks need to care about, but also where their employees are willing to live and work.
My ex works in HR at executive level at a major investment bank. French labour laws etc. never comes up when they consider where to staff up/down (and they do continuously). As for corporate taxes, no investment bank has a problem finding schemes to shift profits around.
> They do have a lot of bad labor laws and quite high taxes, both of which have contributed to France having a very stagnant economy (both in terms of innovation and growth) for decades.
Their GDP per capita is largely moving in lockstep with the UK and Germany, despite far fewer hours worked per year for the average French worker. As it turns out there's very little evidence that these "bad labour laws and quit high taxes" have much impact on growth.
> Not to mention, France is increasingly an outlier in Europe with a punishing corporate income tax rate (33%).
In line with Germany.
> The average across Europe is about 20%. Why would an international bank want to be there, except for local French business purposes?
They are already there for purposes other than "local French business purposes". Many international banks have similar numbers of staff in Paris as in London.
> In line with Germany.
The problem in France is not corporate income tax, as some huge companies do not pay that tax with creative but perfectly legal accounting. The problems are with the "taxe professionelle" which is not based on revenues and the taxes on labour. If some employee receives 2000 euros, usually the company has to provision 3000 to 4000 euros. Most of those labor taxes go to the social security organism which has a budget as large as the state budget. (Edited for grammar and clarity)
This is similar in the UK with employers national insurance contributions.
Total tax wedge in France is higher than the UK and higher than the OECD average, but still in line with Germany according to the OECD [1], just as I stated. Note that the OECD tax wedge data covers total cost paid by both employees and employers.
The "Taxe professionnelle" was abandoned in 2010/2011.
https://fr.wikipedia.org/wiki/Contribution_%C3%A9conomique_t...
Wrong. With the exception of the French banks Natixis, BNP Parbias and Societe Generale...Investment banks have far greater staff in London vs Paris.
Hilarious. Did you know that London is the 7th largest French city? Those people are not here for the weather. And Frexit is not off the cards either.
The French consulate publishes inflated estimates without evidence for obvious self-serving reasons, but verifiable data from the ONS is singnificantly lower than that.
Le Monde's estimate, also given in the article and based on a comparable INSEE data would make it 23rd.
Repeating ad nauseam the unsubstantiated claim that it's the 7th largest French city when all evidence suggests it doesn't even make the top 20 is not a worthwhile contribution to this discussion.
The bank my ex works at has as many traders in Paris as in London, for example, and that's fairly common.
I don't doubt there are many French traders in London - these banks shifts staff and roles around as if they're commodities. But that doesn't change the fact that Paris has a large proportion of the EU financial industry. Not as large as London, but substantial enough for Paris to be a major financial centre.
If London finance is 5 times Paris. It's enough to make it a major financial center yet it's laughable at the same time.
It's not a question if banks will move some portion of staff out of London, but how many and where they go.
London does have more than Paris, but Paris and Frankfurt are the only two other EU cities that consistently get listed amongst the top global financial centres.
What exactly that means in hard cash depends on what you want to count and how, and so the rankings vary greatly depending on who you ask.
Still no sign of movement.
[1] http://www.ccomptes.fr/Publications/Publications/Les-preleve... (in French)
Can you elaborate on the bad labor laws?
But I only have a small experience of the consequence of our current labor laws (which are very hard to change, the current gov tried last year and got massive protests for their trouble).
Edit: Also the employment taxes (the one paid by employers) are very high in France (half of the salary +/-).
Not to mention, France is increasingly an outlier in Europe with a punishing corporate income tax rate (33%). Most of their European competitors have been slashing that rate the past decade plus: Netherlands 25%, Spain 25%, Austria 25%, Sweden 22%, Denmark 22%, Portugal 21%, Finland 20%, UK 20%, Iceland 20%, Czech 19%, Poland 19%, Switzerland 17.9%, Ireland 12.5%. The average across Europe is about 20%. Why would an international bank want to be there, except for local French business purposes?