Peter Ferres, founder-headteacher of Frankfurt’s Metropolitan school, knows a thing or two about London bankers: he used to be one. For seven years, Ferres worked as a managing director for Credit Suisse in the City, marshalling billion-dollar stock market flotations of emerging market companies.

In 2005, he chucked in his career in the Square Mile. After completing a teacher training course, he headed to Frankfurt’s Rödelheim district to found one of the city’s 13 international private schools.

Ten years later, the City is catching up with the German ex-banker again: in the wake of Britain’s vote to leave the European Union, he is on a daily basis fielding calls from London financiers whose employers are considering moving parts of their operation to Germany. Some banks have already block-booked places for the new year at the school where means-tested fees range from €1,800 to €11,500 a year.

Which banks and how many places, the headteacher is not allowed to say, but it has been enough to give him confidence to further expand the school: over the next two years, the Metropolitan is building an additional 10 classrooms.

“Frankfurt was booming anyway, but Brexit has put extra wind into our sails,” he says. “Probably even if Corbyn were to get elected tomorrow and decide to overturn the vote.”

Other schools in the area report similar trends. The highly ranked Frankfurt international school has noted an uptick in calls from London-based parents since July and has been paid visits by 12 international companies, some of which have left headteacher Paul Fochtman’s office with disappointed faces: the school’s waiting list is already several hundred people long.

Even establishments that don’t offer the International Baccalaureate diploma, such as the trilingual Erasmus Frankfurt City school, are planning to set aside an entire classroom for children of bankers swept across the Channel by what German papers refer to as the “Brexodus”.

“We need to start making contingency plans,” says the Erasmus school’s headteacher, Holger Beckmann. “At the moment, Frankfurt isn’t fully prepared yet.”

Education is just one of the sectors of Frankfurt’s public life gripped by a mixture of excitement and anxiety as Germany’s financial capital finds itself in pole position to become the biggest benefactor of Britain’s pending departure from the European Union.

Just left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I'll be spending a lot more time there. #Brexit — Lloyd Blankfein (@lloydblankfein) October 19, 2017

International banks including UBS, Goldman Sachs, Morgan Stanley, Standard Chartered, Citibank, South Korea’s Woori Bank and Japan’s Sumitomo Mitsui Financial Group have all announced they are either making Frankfurt the new hub of their European operation or at least relocating individual departments to the river Main.

The Goldman Sachs chief executive, Lloyd Blankfein, has tweeted that he will be “spending a lot more time” in Frankfurt, with some reports that the company is considering moving as many as 1,000 employees to the city.

With the UK likely to lose its EU “passporting” rights – special licences allowing London-based banks to trade across the European Union – and applications for a German banking licence taking a year to process, financial institutions are under growing pressure to commit.

The head of Germany’s financial regulator, BaFin, has warned that it would cast a sceptical eye at “empty shells or letterbox models”, meaning banks will have to set up fully regulated, functioning subsidiaries with management oversight and IT systems in continental Europe. It a message echoed this week by the European Central Bank (ECB), which like BaFin has headquarters in Frankfurt.

“I expect we will be seeing a lot of movement in the middle of next year,” says Eric Menges of FrankfurtRheinMain, an agency marketing the region on behalf of the local government. “You still have some banks in denial, who believe that Brexit won’t happen. That may be their view. But I don’t see a transition deal for the current banking passport system being at the forefront of the Brexit negotiations at the moment.”

The headquarters of the European Central Bank next to the river Main in Frankfurt. Photograph: Boris Roessler/AFP/Getty Images

Buoyed by the feeling that banks are starting to vote with their feet, the German government is increasingly confident of beating competition from other cities including Dublin, Paris and Vienna to become the future host of the European Banking Authority (EBA), currently a London-based body working to align banking rules in the EU. A decision on the EBA’s new location is expected from Brussels on Monday.

Ambitious plans to unite the EBA with the European Insurance and Occupational Pensions Authority (EIOPA) under one umbrella – dubbed the so-called “twin peak” model – may have been shelved following a lukewarm reception in the European council, but in the German finance ministry, optimism is running high: “If this a fact-based rather than a political contest, then Frankfurt is the strongest candidate,” says one official.

“The city of short distances” is the tagline of the official application: a reference both to the short travel times for commuters and the possibility of uniting the European Central Bank, private banks’ headquarters and their regulator in Frankfurt’s compact financial district.

The city’s appeals court is planning to set up an English-language chamber by January 2018, so that big international companies do not have to turn to London to resolve commercial disputes.

A view over the mixed residential and commercial Deutschherrenviertel quarter with the European Central Bank in the background. Photograph: Armando Babani/EPA

While not everyone shares lobby group Frankfurt Main Finance’s prediction that banks relocating from London will bring 10,000 new jobs to the city over the next five years, speculation is already beginning to play havoc with the real estate market.

Office vacancy rates, though still at 10% following years of downturns in the financial sector, are dwindling. Renting workspace in Frankfurt may still be considerably cheaper than London, Dublin and Paris, but costs are on average already more than twice as high as in Hamburg or Berlin.

Locals are increasingly concerned that the influx of London banks could push residents out into the periphery of the city as property prices keep rising.

Frankfurt’s head of local planning, Social Democrat councillor Mike Josef, has indicated that he could tighten building restrictions for high-rises outside the current cluster of skyscrapers in 2018, well aware of how international financial institutions have come to dominate London’s skyline with their Gherkins, Cheesegraters and Walkie Talkies.

The number of restaurants in Frankfurt’s central Kaiserstrasse has increased in recent years. Photograph: Alamy Stock Photo

Other residents question whether Frankfurt, a city of 730,000, can live up to the expectations of bankers used to cultural life in London, a metropolis of 8.7 million people. At a conference in September, Deutsche Bank’s British chief executive warned that the city was missing “a couple of hundred restaurants” and “a dozen theatres”.

Jacqueline Vogt, a restaurant critic for Frankfurt Allgemeine Zeitung, describes the banking chief’s call for more gastronomic choice as “completely utopian”.

While the number of restaurants on central Kaiserstrasse has exploded in recent years and trendy cafe-bars such as Plank are starting to open in the seedier corners of the red-light district around the central train station, booking a table is usually not much of a struggle.



This year’s Michelin guide lists eight starred restaurants in the city, three fewer than last year. While traditional Frankfurt establishments serving jugs of local ebbelwoi cider attract a healthy mix of blue- and white-collar workers, there are few of the upper middle-range eateries catering to the tastes of novelty-hungry Londoners.

The Plank cafe-bar near the main train station in Frankfurt. Photograph: Alamy Stock Photo

“Frankfurt’s downsides are its upsides,” Vogt says. Instead of accommodating a “work hard, play hard” culture, the city offers opportunities for bankers to de-stress, whether by cycling the vast Stadtpark, hiking in the Feldberg mountains just outside the city or watching football clubs such as Eintracht Frankfurt, FSV Mainz 05, SV Darmstadt or FFC Frankfurt, one of Europe’s most successful women’s teams.

Bankers with families considering a move will be encouraged by Mercer’s 2017 quality of living ranking, which has Frankfurt in seventh place, way ahead of London at 40.

Financial workers in their 20s or early 30s may think twice. In the late 1980s, Frankfurt was considered the capital of German electronic music, but with German reunification, clubs and DJs migrated to Berlin. The city’s only remaining nightclubs of note are Tanzhaus West in the Gutleut quarter and the Robert Johnson in nearby Offenbach, close to the University of Art and Design.

Tellingly, the only big clubbing-related project taking shape at the moment is a museum of electronic music. The pioneer of Frankfurt’s techno scene, Sven Väth, has upped sticks – to London, of all places.

“Frankfurt’s clubbing scene hasn’t developed much in recent years,” says Nils Bremer of local arts magazine Journal Frankfurt. “If you have friends over from London or Berlin and they want to go out on a Tuesday night, well, it’s going to be a bit of a struggle.”

Then again, London bankers staying in Britain may be a surmountable problem for banks relocating to continental Europe: they could just hire locally instead.