Wall Street warns that Paris needs to loosen labor laws if it wants to keep attracting post-Brexit bankers
Top executives at Wall Street’s biggest banks said French authorities should consider relaxing some elements of the country’s strict labor laws in order to build on the momentum of Paris as a European finance hub in post-Brexit Europe.
Citigroup Inc.’s headcount has more than doubled to about 400 in the French capital, while JPMorgan Chase & Co. now has about 900 employees in the city. At Morgan Stanley, executives originally expected to have about 30 staffers on a quantitative research team in Paris, but now they’re hoping to expand that to as many as 150 people.
But the executives warned that they might be hesitant to add additional large swaths of talent to their hubs in France because of the country’s labor protections, which limit their ability to widely cull staffers when there’s a downturn in dealmaking and capital markets activity as has been the case in recent years.
“We’re a cyclical industry, we need to be able to be flexible on headcount,” Emmanuel Goldstein, Morgan Stanley’s head of France, said at an event hosted by Bloomberg alongside executives from JPMorgan, Citigroup and Goldman Sachs Group Inc. “It doesn’t mean firing half of the people. This is just adjustment of the headcount, but it needs to be feasible in good conditions and in a timeframe that is reasonable.”
Their warnings come as cities across Europe vie for more financial services firms to bring their high-paying jobs and glitzy trading floors to their downtown districts. Amsterdam, Frankfurt, Dublin, Milan, Madrid and Warsaw are also seeing gains in the number of bankers walking their streets.
“When you ask a global business unit head in any of our banks whether that person wants to grow headcount massively in France, they would say ‘Why in France?’ I will grow it in Hong Kong or I will go for London. I will go for anywhere at this point,” Goldstein said.
Paris in recent years has emerged as a financial hub in continental Europe, attracting banks and hedge funds that sought a gateway into the European Union after Brexit. The UK’s vote forced Wall Street’s biggest banks to adjust operations to ensure they were trading European assets — from government bonds to interest rate products to equities — within the 27 countries that remain in the European Union.
Soon, global hedge funds like Citadel and Millennium Management opened offices across the city and Wall Street’s biggest firms have set out to relocate and hire hundreds of traders for their bright new trading floors in Paris.
“The labor market is more complicated in France, having more flexibility is something that is important to all of us,” Marc d’Andlau, the co-head of Goldman Sachs’s Paris office, said at the event. “When you grow headcount in an important way, it becomes more and more important.”
The comments come as the world’s largest banks have shed thousands of jobs in recent quarters amid a dearth of dealmaking and capital markets activity.
‘Not So Easy’
France is now working on a new plan to further bolster the attractiveness of Paris as a European Union finance hub. Those moves have spurred additional firms from Asia, the Middle East, Canada and Australia to contemplate moving business to Paris.
“It wasn’t a given at the moment of Brexit that Paris will win,” Cecile Ratcliffe, Citigroup’s chief country officer for France, said at the event. “What really made the difference more than anything else was the pool of talent, the pool of talent in France coming from the large French banks.”
The country’s schools have also helped cultivate the local talent pools, Ratcliffe said. Two French universities are ranked in the top 20 business schools across Europe, according to data compiled by Bloomberg.
Still, the executives said it wasn’t always easy to convince traders to make the move to Paris from their offices in London. It also didn’t help that some rival banks were initially poaching staffers with the promise that they wouldn’t have to move into continental Europe.
“It was not so easy to move with the children, finding the nanny and so on, people were reluctant,” JPMorgan’s Alexis Sztejnman, who leads markets and platform sales for France, Belgium and Luxembourg. “Now that people have adjusted, they’re actually very happy in Paris.”
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