One Sole Aim: “Steal Away” Global Finance from London

City of London-based financial institutions are intensifying their search for plan-B locations as concerns continue to rise about Brexit’s potential threat to their unfettered access to EU markets and workers. With an estimated 35% of London’s wholesale market activities forecast (by Brussels-based think-tank Breugel) to migrate across the English Channel in the coming years, the race is on to displace London.

However, as the competition for Brexit spoils intensifies, relations between euro nations are showing signs of strain. Tax-haven par excellence Luxembourg, equipped with a multi-lingual specialized workforce, is likely to be hot property in a post-Brexit world. The country’s competitive tax rates have already caught the eye of AIG, private equity giant Blackstone, and Lloyd’s of London, the world’s largest specialty insurance market, all of whom have expressed an interest in relocating part of their London operations there.

Luxembourg’s success has drawn the wrath of fellow Eurozone members like Ireland, which recently complained to the European Commission about “dangerous competition” from rival centers competing to host financial firms.

“Other cities in Europe are being very aggressive in trying to win business,” Eoghan Murphy, the minister in charge of promoting Dublin’s financial center, told Reuters. Murphy raised concerns about “creeping regulatory arbitrage,” a reference to undercutting rivals with lax rules, something about which the Irish republic knows a thing or two.

But it’s not just Europe’s tax havens that are vying to woo the world’s biggest financial institutions; also at it are some of the continent’s largest capitals.

Paris has promised to unfurl the red carpet for the City of London’s highest paid bankers by offering low tax rates and bank-friendly legislation while also seeking to grow as a clearing center. It’s in stark contrast to the combative stance France’s President Francois Hollande took against “the world of finance” – “my true opponent,” he called it – before winning national elections in 2012.