Things are going well for the financial centre of Frankfurt. While geopolitical tensions are causing alarm in the overall economy, the banking metropolis on the Main is enjoying increasing importance – also internationally. The establishment of new institutions, new skyscrapers in the heart of the banking district, and the continuing growth in jobs at financial service providers, do not seem to fit in at all with the rather inhospitable economic conditions. The apparent contradiction makes sense, as became clear last week at the Börsen-Zeitung Finanzplatztag. Frankfurt plays a central role for a Europe that is trying to emancipate itself within the new world order.

To address the needs of the location in Berlin in a more targeted manner, the Hessian state government recently established the so-called Financial Centre Cabinet, and submitted proposals developed in cross-pillar cooperation to the Federal Ministry of Finance.

„A financial centre needs the support of politicians,“ emphasised Helaba Chief Economist Gertrud R. Traud.

And Federal Minister of Finance Jörg Kukies (SPD) signalled in his opening speech via video that the initiative is pushing at open doors: Regardless of its makeup, the next federal government „will continue to work for the competitiveness and well-being of the financial centre“.

The years of uncertainty that followed the financial crisis are a thing of the past. Oliver Behrens, President of Frankfurt Main Finance, certainly perceives a change in mood. „After the financial crisis, we were happy when at least a climate of benevolent tolerance emerged; now we seem to be one step further", he said. The first successes of the new co-operation are the joint efforts establishling the green standard setter International Sustainability Standards Board (ISSB) and the EU Anti-Money Laundering Authority (AMLA) in the city.

These new institutions are likely to have contributed to Frankfurt's recent rise of three places in the global financial centre ranking of London-based think tank Z/Yen Group. Frankfurt now ranks 10th, making it the leading financial centre in continental Europe. In the recently published Open Financial Ecosystem Index (Ofex), the financial centre ranking of the Center for Financial Studies (CFS) in cooperation with the French Institut Louis Bachelier (ILB), Frankfurt has also climbed one place and is now ranked 5th.

As Frankfurt's international role grows, so does its domestic importance. According to Helaba's latest financial centre report, the proportion of the approximately 620,000 bankers in Germany that are located in Frankfurt has risen from 9% to 11% in the past decade. However, these figures are from the beginning of 2024, since when the number of jobs in Frankfurt's financial sector has continued to rise.

According to Helaba's financial centre experts Traud and Ulrike Bischoff, there were 71,000 employees subject to social security contributions in Frankfurt's banks, the Bundesbank, and the stock exchange, in the middle of last year.

There have never been so many bankers in the city, and their number is still growing a little, at least for the time being. Helaba's financial centre experts expect the number to rise to 73,500 by the end of the year, not even including employees of insurance companies, fund companies and supervisory institutions. For years and decades, the trend on the Main has been pointing upwards, while in the rest of Germany the sector is reducing its workforce.

However, the shortage of skilled labour is increasingly acting as a drag on hiring, as Traud and Bischoff state. Commerzbank's defence against Unicredit is also already having a negative impact. To achieve its ambitious return targets more quickly, the bank is cutting 4,000 jobs. Although this is to be partially compensated for by new jobs, these are more likely to be created outside the Frankfurt headquarters. What it would mean for the financial centre if the Italians were to come on board is still largely unclear.

The financial centre owes its growth primarily to foreign banks. Fuelled by Brexit, the world's leading financial institutions are flying the flag in Frankfurt. However, German financial institutions are also increasingly attracting staff functions, sustainability, digitalisation and regulatory experts to the city of 750,000 inhabitants. And finally, seven of the ten largest banks have their German headquarters in Frankfurt: Deutsche Bank, DZ Bank, KfW, Commerzbank, J.P. Morgan SE, Helaba and ING Germany.

In the cityscape, the completion of the „Four“ high-rise group planned for this year, whose Tower 1 is now the headquarters of Deka, and the Central Business Tower, which is currently under construction, illustrate the speed of the building boom. Commerzbank will move into the 205-metre-high building when it is completed in 2028; the developer is Helaba.

However, Behrens warns against getting caught up in the height frenzy. Frankfurt is not realising its potential and needs to work on its competitiveness, warns the President of Frankfurt Main Finance. All players in the financial centre must work „hand in hand“ to ensure that the location does not fall behind.

CFS Managing Director Volker Brühl is concerned about bureaucracy, high energy costs and taxes. In combination with considerable expenses for living and housing, this is detrimental to the attractiveness of Frankfurt. This could at least be mitigated by improving the „intellectual infrastructure“ through co-operation between universities and the financial industry. One dilemma is that, on the one hand, there is a desperate need for staff, while on the other hand, jobseekers with experience in the sector do not have the qualifications required. For the coming years, Helaba's experts expect demographic developments and consolidation in the banking sector to leave their mark on growth in Frankfurt's banking sector employment.