„A financial centre needs political support“
The Frankfurt financial centre would do well to strengthen its political ties, says Helaba's Chief Economist, Gertrud R. Traud. She welcomes the fact that it is now receiving the necessary political attention, as demonstrated by the recently established financial centre cabinet initiated by the Hessian state government. This initiative brings together politics and the financial industry to jointly advance the location. „Now, the challenge is to ensure that the discussions held there also reach the federal government in Berlin“, Traud empasises. „A financial centre needs political support.“
In the past, politicians, especially from Berlin, showed only limited interest in the Hessian financial hub. But this dynamic has changed significantly since the successful bid to bring the EU Anti-Money Laundering Authority (AMLA) to Frankfurt, an achievement largely attributed to a joint effort by financial and political representatives. „The situation for banks in Germany has improved, which also benefits the financial centre“, states Traud. „As interest in German banks grows, so does interest in the financial centre.“
The newly established financial centre cabinet raises hopes within the financial industry for a closer relationship with politics and concrete steps to strengthen Frankfurt. While this approach may seem unusual in Germany, it has long been standard practice in neighbouring France. „The French government actively supports the financial centre in Paris and explicitly advocates for it“, notes Traud. She emphasises that Frankfurt has been on equal footing with Paris for many years.
Supervision and regulation hub
Another key advantage Frankfurt holds is its concentration of regulatory and supervisory institutions. „Proximity to authorities is an asset. Business leaders want to be where the regulators are“, explains Traud. The arrival of AMLA will add to an already strong network, including the Deutsche Bundesbank, the ECB Banking Supervision, the European Insurance and Occupational Pensions Authority, and the International Sustainability Standards Board (ISSB), all headquartered in Frankfurt. Additionally, BaFin maintains a strong presence in the city. The demand for banking professionals remains high, Traud notes: „And when AMLA arrives, banks will have to follow suit.“
The number of bankers in Frankfurt has been rising for years, defying the nationwide trend. According to Helaba’s forecasts, the number of social security-contributing employees in the sector is expected to increase to around 73,500 by the end of the year, up from approximately 70,700 in early 2024.
When asked about a potential takeover of Commerzbank by Italy’s UniCredit, and its possible implications for Frankfurt, Traud remains cautious: „I won't comment on individual institutions. But in general, consolidations do not necessarily have a negative impact on the financial centre or employment", she says.
A growing concern for Frankfurt’s banking sector, however, is the increasing shortage of skilled professionals. „Employment growth in Frankfurt is being slowed by demographic trends“, observes Traud.
For the past ten years, we’ve been on a downward trajectory, and that’s a burden for everyone – including the financial center.
Another major challenge is Germany’s declining competitiveness. „For the past ten years, we’ve been on a downward trajectory, and that’s a burden for everyone – including the financial center“, she warns.
Calls for reducing bureaucracy
To enhance competitiveness, Traud suggests looking to the new US administration for inspiration regarding bureaucratic reduction. „Elon Musk’s approach is not exemplary, but his call for greater efficiency in administration points in the right direction.“
In this context, she welcomes the European Commission’s recent commitment to reducing reporting requirements by 25% and cutting bureaucracy. „Whether this will actually be implemented in the EU is another question.“ Commission President Ursula von der Leyen has just unveiled broad proposals to ease the regulatory burden.
Full agenda at Finanzplatztag 2025
Gertrud Traud will be one of many speakers at Finanzplatztag 2025, being hosted by Börsen-Zeitung on March 3-4. Key topics impacting banks, stock exchanges, and investment funds will be discussed.
Other prominent participants include Federal Finance Minister Jörg Kukies, ECB Banking Supervision Chair Claudia Buch, ESMA Chair Verena Ross, KfW CEO Stefan Wintels, Commerzbank CEO Bettina Orlopp, Deutsche Börse CEO Stephan Leithner, and many more leading figures from the financial industry. More information and registration: live.boersen-zeitung.de.
