pension333: Frankfurt offers glimpse of an idealised financial sector

For many in the banking industry, Germany's economic hub offers a refreshing change to London's macho bearpits

How is Frankfurt different from London as a financial centre? Over the past week I have tried to ask as many insiders across Frankfurt as possible. A picture emerges of a city where finance is simply a job, not an all-encompassing identity or a way of life.

Meanwhile, life in Frankfurt does appear almost offensively good. "When I first got here, I just couldn't believe how small it was," said a British recent arrival who worked in the City for years. "You think, this is Germany's or even Europe's financial centre. You assume it's very big. It really isn't."

As a city, Frankfurt is a tenth the size of London, and in spite of the skyscrapers, its financial sector is vastly smaller too.

A trader in his late 20s described dealing with a London trading floor: "I call and speak to Tom. Next time, someone else answers the phone, and next time, someone else again. These places are just huge."

Add to this the enormous turnover. "In Frankfurt you've got people who have been trading particular Pfandbriefe [bonds] for 25 years. That's what they do. In London, people are fired easily and hired easily. Frankfurt doesn't have that recruitment and headhunting culture." You have traders and dealmakers working in Frankfurt, obviously. But all the truly huge deals and trades are happening in London.

Another trader said: "In Frankfurt there simply aren't any 24-year-olds with a $10m bonus. You only need a few of those, and public opinion is affected by their excesses."

A pivotal event for the city came a few years ago when Deutsche Bank moved the headquarters for its investment bank ? with its bonus-heavy activities around financial markets and dealmaking ? to London. Several people in both London and Frankfurt claimed that if Deutsche Bank Frankfurt was "a family", London headquarters was like "a boxing ring".

Frankfurt gets filtered for testosterone, said one banker. "Genuinely ambitious Germans go to London. Meanwhile any expats who decide to settle down here do so for the quality of life." Indeed, walking around town and seeing German pedestrians wait before a red traffic light without a car in sight, it's hard to imagine a Master of the Universe setting up camp here. Insiders use terms such as sedate, steady and stable for Frankfurt.

Bankers in Frankfurt get paid significantly less, all the way up to the CEO, and they pay considerably more taxes. Meanwhile finance is far less controversial, it appears, and I did not find the sense of victimhood and siege mentality you see among quite a few bankers in London. "Finance in Frankfurt is more knitted into the wider fabric of the economy," said one financial analyst. "You have the fair, it's a transport nexus and they have some real industry here. Finance is less of an end in itself." And the sector holds less clout. "It's not like German bankers sit together and say: 'let's be modest'," the analyst said. "You have the same tendencies as in London. But German bankers operate in a different environment and the financial lobby gets less of what it wants."

And then there is the quality of life. A newcomer to London myself, I began to get slightly annoyed over the course of the week by the raving over Frankfurt's superb cultural offerings, its forests nearby, the massive yet peaceful beer and wine festivals along the river. Drinking is not about release here, several Brits said, so you don't get the English excesses. Frankfurt airport is the size of Heathrow but only 15 minutes by car from the city centre. The Hauptbahnhof is a hub for the superfast Ice trains.

The recently arrived Brit said: "Here I can ride my bike to work, or walk there in 20 relaxing minutes. Nobody in my office has lunch at their desks. The ones with kids live out of town in the Speckgurtel ("bacon belt"), and they need to drive maybe half an hour or so. Because the commute isn't such an epic struggle, people arrive at work in a different mindset. I imagine they must also come back to their families in a different mood."

The trader in his late 20s agrees. "London salaries and bonuses are much higher. But in Frankfurt your money goes further, even after the higher taxes. Housing is far cheaper, there are no crazy school fees, and we have subsidised daycare."

Sounding almost smug, he added: "I like to tell my boss, if you want to send me to London, you are going have to pay me four times as much."

Joris Luyendijk

Source: http://www.guardian.co.uk/commentisfree/2012/sep/21/frankfurt-glimpse-idealised-financial-sector

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