Goldman Sachs is one step closer to making Frankfurt its new European home post-Brexit

Goodbye London, hello Frankfurt.
Goodbye London, hello Frankfurt.
Image: Reuters/Kai Pfaffenbach
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Goldman Sachs is pushing ahead with making Frankfurt, Germany, its key European base. This week, the Wall Street giant agreed to lease multiple floors for offices in a 38-storey building, as part of its Brexit contingency plans.

The Marienturm tower is located in the heart of Frankfurt’s business district and Goldman is looking to take around the top eight floors, which is said to accommodate around 1,000 workers. “This expanded office space will allow us to grow our operations in Germany to serve our clients, as well as provide us with the space to execute on our Brexit contingency plan as needed,” said a Goldman Sachs spokesman to Bloomberg. Quartz also contacted Goldman for comment.

Major financial players like Goldman use London as a financial hub due to its membership within the European Union. The UK’s capital acts a conduit for some of the sector’s most lucrative businesses, such as the processing of euro-denominated derivatives contracts by clearing houses, which is worth around €930 billion ($1.1 trillion) per day of trade.

But in light of Britain’s prime minister Theresa May pushing for a “hard Brexit” dozens of banks and businesses have been vocal about looking to relocate or expand operations in Europe and US. Frankfurt seems to be the winning city for relocation—Morgan Stanley, Citigroup, and Standard Chartered are among those eyeing the city for expansion. Goldman has also been pretty clear on its Frankfurt plans in light of Brexit. In Sept. it said it could quadruple its headcount in the German hub, while earlier this year Richard Gnodde, the head of Goldman Sachs International and co-chief of its investment banking division said that the bank would start moving staff in 2018.

This week, the Bank of England’s deputy governor also warned that banks could trigger their contingency plans just after Christmas. There is an upside for the Goldman bankers that do face relocation though—apparently they get paid 13% more than their colleagues elsewhere.