Emmanuel Macron spent Monday entertaining some of the biggest names from Wall Street at Versailles, while his government has been working on a series of measures to boost the country’s attractiveness to the financial services industry.
Alexandre Holroyd, a lawmaker from Macron’s Renaissance party, explained the bill he proposed earlier this year at Bloomberg’s Future of Finance event in Paris on Tuesday. The plan includes changes to encourage initial public offerings and direct more investment to smaller companies.
Keeping Paris an attractive place for companies requires “constant work,” Holroyd told an audience of finance executives. “This bill is just part of the process of continuously working and trying to solve the problems that, essentially, you people raise.”
In a concession to one of the main demands from Wall Street employers in Paris, the proposed bill would also make it easier and cheaper to fire some high-earners.
The French government is giving “real support” to the banking sector, Bank of New York Mellon Corp. European Bank Head of Markets Ingrid Garin said at the Future of Finance event on Tuesday. Even so, she also called for “more flexibility around hiring and firing,” saying the country’s strict labor laws are a “sore topic.”
On Monday, Wall Street’s most prominent chief executives, including Bank of America Corp.’s Brian Moynihan and Goldman Sachs Group Inc.’s David Solomon, descended upon Versailles to attend the seventh installment of Macron’s Choose France event. The French president unveiled new investments worth more than €15 billion ($16.2 billion).
While boasting the country is more attractive than when he took power in 2017, Macron also acknowledged the remaining challenges to spur growth. In particular, he said the lack of a common regulatory environment in Europe prevents French banks such as BNP Paribas SA to make deals across borders.
“We do need a consolidation but we do need as well an actual domestic market as Europeans, which is not the case,” Macron said in an exclusive interview with Bloomberg TV Monday. “We have to deal with 27 regulations.”
Long-brewing plans for a European capital markets union would encourage savings to circulate across the continent and make sure that capital is “invested in the right sectors and the right geographies,” he said. He also pointed to the latest Basel regulations, which are set to be adopted more strictly in Europe than the US.
“As long as it’s not implemented by the US competitors, it should not be implemented by the European competitors,” he said. “This is a killer for risk taking because these regulations prevent our banks from investing in equity. Which is exactly what you need.”
The summit ended Monday night with a fancy dinner attended by a raft of A-list CEOs, among them JPMorgan Chase & Co.’s Jamie Dimon and Henry Kravis of KKR.
Brexit Boost
The charm offensive comes as France tries to cement Paris as the continent’s major financial hub after Brexit. The city benefited as Wall Street’s biggest banks adjusted their operations so European assets — from government bonds to interest rate products to equities — traded within the 27 countries that remain in the European Union, rather than through London.
Paris has already enjoyed some of the spoils of Brexit, with Citigroup more than doubling its headcount to about 400 in the French capital, while JPMorgan now has about 900 employees in the city. Last month, Goldman Sachs’s head of dealmaking for financial institutions in the region relocated to Paris and is planning to double his team in the city as deals among banks and insurers accelerate.
Bank of America’s Moynihan told Bloomberg TV on Monday that his firm has upscaled from a hundred people in Paris to about 750. “It’s been a great experience for us,” he said. “They’ve done a good job in changing France’s reputation around the business community.”
Hedge funds have followed suit, with giants including Citadel and Millennium Management opening offices across the city.
To be sure, some firms have backpedaled on plans to expand in the city. Brevan Howard is reconsidering its Paris office as part of a broader restructuring plan, Bloomberg News reported last month. ExodusPoint, which was among the first foreign hedge funds to open an outpost in Paris, has now decided to shutter it.
Still, the push to lure more business to Paris has translated into more than 7,000 extra jobs in the financial sector between 2017 and 2022, Macron said earlier this year.
Morgan Stanley is planning to expand its European campus in the French capital through its global research hub. The US bank, which has increased its Parisian headcount from 150 to about 400 since 2021, will add 100 staffers across all its Paris divisions. In particular, the bank will bulk up its local research and development center, which has 90 employees now and could grow to 120, according to a Morgan Stanley spokesperson.
“I’m a lifelong New Yorker, but on days like today, I wish I lived in Paris,” Morgan Stanley CEO Ted Pick said Monday at the bank’s campus near the Parc Monceau. “Paris is very much the center of Europe winning and we want to win along with Paris.”
