Amsterdam quietly courting London finance business

By Thomas Escritt

AMSTERDAM (Reuters) – Before the 2008 financial crisis, Amsterdam’s elegant canalside offices were home to a number of global banks. With Brexit casting a pall of uncertainty over London, city officials see a chance to lure back some of that business.

Britain’s vote to leave the European Union has brought gloom to Europe’s financial capital, with banks contemplating relocating thousands of staff rather than waiting to see what deal Britain secures with its erstwhile partners.

Rivals cities such as Paris and Berlin have been trumpeting their readiness to host finance and technology businesses fleeing London, but Amsterdam, less than an hour’s flight away, has adopted a lower-key approach.

“I don’t think any company is going to decide based on this marketing campaign,” Amsterdam’s deputy mayor Kajsa Ollongren told Reuters in an interview.

The city is focusing on more practical measures. It is expanding its provision of free public education in English, creating 1,500 new places over the next four years, believing that good schools will be a key factor for companies scouting locations.

There are currently 5,400 places in state schools in Amsterdam who need to follow an English-language curriculum.

As France promised tax breaks for expatriates after the June 23 vote, Amsterdam quietly added staff to its team targeting Britain and financials businesses. The Dutch foreign investment agency moved more staff to its London office.

BAILED OUT

The financial crisis hit the Dutch financial sector hard, with the number of hours worked in banks — a proxy for the number of employees — falling 12 percent in the six years to 2012, even as total sector employment in Europe grew.

Three of its four top banks were bailed out. Swashbuckling global flagship ABN Amro was first devoured then nationalized. After hiving off almost all its international business it was refloated last year.

While ING remains a global player, and the Netherlands is still home to a host of niche financial houses, the crisis, which triggered years of painful austerity, fostered a mood of hostility toward bankers which has led to the imposition of some of Europe’s toughest caps on bonuses.

The old days will not return. “It has to be different,” Ollongren said. “The regulation has changed… We have much better control to make sure we don’t come to a too-big-to-fail situation again.”

They also hope to capitalize on the city’s connectivity: home to Europe’s largest internet exchange, Amsterdam has some of the world’s fastest data connections — crucial to the clearing, high-frequency trading and financial technology firms, such as Flow Traders , in which the city has existing strengths.

Amsterdam’s financial center would not be restored to its pre-crisis scale, Ollongren said.

Banks that do decide to come back will have to compete for prime locations with tech start-ups and boutique software companies that have taken their places in the 17th century canal houses.

(Reporting By Thomas Escritt; Editing by Keith Weir)