The German central bank expects lenders to transfer €397 billion more than the €278 billion it has already moved from Britain post-Brexit, it said in a study, as negotiations intensify surrounding the conditions for the UK's new relationship with the European Union.
The European Central Bank estimated in August 2019 that €1.3 trillion in assets would be transferred to the eurozone from Britain ahead of Brexit.
Britain left the 27-nation bloc at the end of January, but is currently negotiating its future relationship with the EU amid a transition period that ends on December 31st.
(article continues below)
See also on The Local:
The spectre of a “cliff-edge” no-deal Brexit, which would add more obstacles to cross-border business, has risen in recent weeks as negotiations stalled over fair-trade rules and fishing rights, with EU Commission chief Ursula von der Leyen saying last week that talks were in a “critical phase”.
The Bundesbank study confirms banks' preference for Germany as a base for operations away from London, estimating a total of €675 billion in relocated assets.
By comparison, around €150 billion of assets will be moved to France by the end of the year, France's central bank governor said.
Sixty-four financial institutions have applied for banking licences in Germany, with 40 so far having been approved, and the remainder pending.
Financial institutions moving operations out of the City of London should boost bank workforces in Germany by as many as 2,500 positions.
US bank JP Morgan said in September it would shift some €200 billion from the square mile to Frankfurt, which would make it one of Germany's biggest lenders by assets.
The Bundesbank also said the financial sector was generally well prepared for Brexit, echoing ECB supervisory board chair Andrea Enria, who said that
banks are “now ready to take the hit, to some extent.”