If you fear for London's future as Europe's – and the world's – foremost financial hub, recent headlines make for painful reading.
All summer long, representatives of global lenders have fretted in print and on TV about the city's future.
Leading financial institutions seem to be preparing for the worst: a "hard" Brexit that leaves London untethered from Europe. And they are making painstaking efforts to ensure they remain directly plugged into the single European market.
So far at least, London's loss has been Frankfurt's gain. The tidy little city on Germany's Main river has emerged as probably the largest beneficiary of the already long and tortuous Brexit process. Over the next few years, hundreds of well-paid risk analysts, derivatives traders and compliance specialist will sell their houses in London and look for new accommodation in the rolling countryside of Hesse, one of Germany's richest states, where Frankfurt is the largest city.
Daiwa Securities, Nomura and Sumitomo Mitsui, three of Japan's biggest financial players, have said they will shift their European banking and securities units to Frankfurt. Citi and Deutsche Bank are making similar moves. The US bank Citi will transfer the bulk of its EU trading operations there, while the Frankfurt-headquartered German lender Deutsche plans to build a new booking centre in its home town. Frankfurt Main Finance, the city's financial lobby group, expects up to 10,000 London jobs to relocate there in the years ahead.
But is this ambition achievable? Why is Frankfurt the main European focus for fretful banks rather than, say, Paris, Amsterdam or Dublin? And will London's long-term loss, as it is perceived by many analysts and the bulk of the English – and German-speaking media – really be so very great?
The first question is easy to answer. Frankfurt already has skin in the game. It was a regional financial hub for centuries, but that process accelerated after the Second World War.
When the Bundesbank, then-West Germany's central bank, was formed in 1958, Frankfurt was chosen as its home. Forty years later, EU politicians settled on the city as the best locale for the new European Central Bank (ECB).
Frankfurt may not boast Paris' culture, or Dublin or Luxembourg's competitive tax base, but it is an accessible city with great infrastructure, including a world-class airport and internationally renowned trade fairs.
This centrality means Frankfurt is not only the beating financial heart of Europe's largest economy, but also home to an institution (the ECB) that is likely to become the most important single regulatory body in the euro zone in the years ahead.
All of which hands Frankfurt a powerful marketing tool when pushing to attract lenders looking for a stable city in which to set up shop, or from which to expand existing operations.
"If you're a Brazilian or a Chinese bank that needs to offer financing to clients in mainland Europe, do you want to have to negotiate separate agreements with 27 European nations," asks Michael Mainelli, the chairman of Z/Yen Group, a London-based think tank.
"No. And if that problem can be solved by moving to a European jurisdiction, it's obvious what your decision will be."
Frankfurt is the only city in the post-Brexit EU that boasts the kind of soft-and-hard infrastructure that global lenders desire. Dublin and Luxembourg are capable, lovely cities, but also small and provincial. Paris is filled with excellent lawyers, actuaries and risk assessors. Under its new president Emmanuel Macron, the Fifth Republic is manically selling itself to global banks as a premier financial destination, pledging to slash taxes and onerous regulations.
But this is a country that believes in the pre-eminence of the state over the private sector. "Whatever France says about being welcoming, the big foreign banks know it is a closed shop where they will always play second-fiddle to the French banks, who exist to finance the government's industrial policy," notes Bill Blain, a strategist at London-based Mint Partners. "Foreign banks will never feel truly at home there."
Then there is the issue of cost. London is a hellishly expensive place to operate. Parisian prices can be just as eye-watering. Frankfurt by contrast is compact and far cheaper (although prices have risen sharply post-Brexit). Ostend, with its grand townhouses, is a 20-minute walk from the Bankenviertel, the banking quarter, while Taunus, a collection of villages to the north of the city, is easily accessible by road and rail. And while it will never be as vibrant as London (or Paris or Berlin), Frankfurt is finally doing something about its image as one of Europe's most boring major cities.
Its lower commercial and residential rents aid its cause in another, indirect way. The Brexit vote handed international lenders a golden chance to tackle the longstanding issue of the cost of human capital.
For decades, banks chose to locate as many staff as possible in a single city, hewing to the idea that good decisions tended to be made by bigger teams. That was a boon to London – the location for many if not most of those employees – and to Britain's coffers.
Brexit changed this equation. "Banks were saying: 'Hang on, why do so many of our mid and back-office staff work in Canary Wharf, one of the most expensive office locations in the world," notes Christopher Wheeler, a bank analyst in London with Atlantic Equities. "Frankfurt, for many of them, was the obvious place to go. It's a lot cheaper than London. I was there two weeks ago, and I marvelled at how many offices were going up there." Frankfurt is at heart a banking centre, and its power and influence will expand in the years ahead.
How great will be London's loss? That is rather harder to answer. Anyone scrutinising the pages of UK financial media over the summer months would be forgiven for assuming that London's best days lie firmly in the past. Given the number of banks shifting jobs to Frankfurt, it is a quick and an easy assumption to make. It is also probably the wrong one.
The truth is that Europe needs London just as much as London needs the EU, and for several reasons.
First, there is good a reason why London, and not Frankfurt, has for decades, even centuries, been Europe's leading financial hub. The German city is a banking sector.
But the UK capital boasts a deep well of financial expertise that stretches back centuries, possibly to before the Norman invasion of the British Isles in 1066. It boasts diversity, talent, the clarity of common law and the linguistic benefits of having a global language as its mother tongue.
This critical mass of financial knowledge and ability is hard to find anywhere else on the planet and Brexit is unlikely to alter that equation, in the near term at least. "London will be London with or without banks," notes Mr Blain.
"Serious and complex financial transactions require a body of knowledge and expertise and the only place these exist in critical mass in Europe is in London."
London, he adds, is "hard-wired to have a mercantile approach to business. It approaches legal issues, risk management, capital markets, banking, from an international point of view rather than a local point of view. Germany has always focused on building and funding SMEs. France, on its industrial policy. But Britain's brilliance is financial engineering. That's the way it has always been."
Nor is the advent of high-speed voice and video communications likely much to alter this equation. Just as chief executives still fly half the way around the world to eyeball an acquisition or engage with key shareholders, bankers are still at their most effective when physically surrounded by the largest possible group of their peers, and by a deep well of financial and non-financial talent (lawyers, actuaries, public-relations experts, boutique M&A specialists).
"No matter what the digital age offers in terms of being able to trade across TV screens, it will always be better to scream at the guy next to you about a transaction," says Mr Blain. Again and in the main, that benefits London over Frankfurt or anywhere else in Europe.
One final point deserves to be made here. In the year since Britain voted to leave the EU, European cities from Frankfurt to Paris and Barcelona to Amsterdam have jockeyed and jostled, desperate to claw white-collar banking jobs away from London. So far at least – and noting that London has not yet suffered a genuine exodus of financial talent – Frankfurt appears to be the winner. Yet it could be argued that a weakened London hurts the entire continent, and is in no one's best interests. In its latest Global Financial Centres Index, published in March, Z/Yen Group noted that Brexit was a "major source of uncertainty" for every European financial centre. While London retained its No 1 ranking in the annual survey, it lost 13 points over its previous score. Luxembourg's ranking slipped to 18th, from 12th in 2016, with Frankfurt falling four places, to 23rd. Amsterdam, Paris and Dublin also lost ground.
The real beneficiaries in this year's poll were non-EU cities. Singapore and Hong Kong, genuine financial hubs tipped to be the biggest beneficiaries of Brexit, improved their tallies, as did every major city in Asia. Geneva and Zurich, non-EU Switzerland's twin financial hubs, both climbed a few rungs.
The main lesson to draw from the survey, says Mr Mainelli, is that Europe needs a strong London. "Frankfurt may attract a few second and third-tier banks, and some mid-office staff from global lenders. But if a hard Brexit means London is no longer the gateway to Europe, it's not clear to me that another city in the EU can take its place.
"And without a plausible alternative to London, the whole of the continent will slip down the ladder. And that helps no one."
