(Bloomberg) -- The German government has drawn up plans to make it easier to dismiss high earners in the finance industry as the country competes with France and the UK to attract top bankers.
Under the plans, existing, less-protective rules for risk takers at systemically important banks will be extended to insurance companies, securities institutions and investment firms, according to a finance ministry document seen by Bloomberg.
The aim is to “strengthen Germany’s financial location in competition with other European financial centers that don’t have such restrictions in terms of dismissals,” the paper says. The plans were first reported by Handelsblatt newspaper.
Germany, France and other European Union nations have been vying to attract business from London since right after the 2016 referendum that led to Britain exiting the bloc.
Both Frankfurt and Paris have benefited as many companies had to relocate their headquarters from the UK capital to continental Europe in order to continue to benefit from the EU single market.
Frankfurt prevailed over Paris, Madrid, Dublin and other European capitals in February when it was awarded the right to host the EU’s new money laundering authority, AMLA.
Finance Minister Christian Lindner had lobbied hard in Brussels to win the bidding contest and committed about €20 million ($22.3 million) in subsidies to secure about 400 jobs.
Additional planned measures in the German finance ministry document include:
- Abolition of the employee and complaints register at financial supervisor BaFin
- Increase of thresholds for BaFin’s loan reporting system to €2 million from €1 million
- Relaxing requirements to submit a certificate of compliance for OTC derivatives
- Tax advantages for investments in venture capital (e.g. tax cuts for reinvestment of profits from selling shares)
- Higher tax-free allowance for employee share ownership (up to €5,000 per year), lower minimum nominal value of shares of €0.01 compared with €1 previously
--With assistance from Nicholas Comfort and Laura Malsch.
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