With one voice for Germany’s most important Financial Centre

Annual Report 2015 Frankfurt Main Finance e.V.

“ THE STRENGTH

OF FRANKFURT IS IN ITS HISTOR-ICALLY EVOLVED AND CLOSE INTEGRATION OF THE REAL AND FINANCIAL ECONOMIES.

Financial centre

4 Frankfurt – Anchor of stability in the financial crisis

6 Facts and figures on the financial centre

7 The future of financial centres

Frankfurt Main Finance e.V.

8 With one voice for Germany’s leading financial centre

Topics and activities at the financial centre

10 Regulation

Centre of European financial market supervision

14 International relations

Europe’s hub

18 Renminbi

A trading centre gathers pace

20 FinTech

Frankfurt offers more

24 Community

Kick-off at the financial centre

26 Academics

Specialised services for every goal

picture creditsTitle: fotolia.com; all icons from thenounproject.com; p. 2: istockphoto.com; p. 4: PIA city of Frankfurt am Main, left to right: Karola Neder, Rainer Rüffer, Tanja Schäfer, Rainer Rüffer; p. 5: Jens Ripperger, der ripperger Medienproduktion GmbH; p. 7: www.gruene-hessen.de; p. 8: Axel Gaube, Kaleidomania; p. 10: all fotolia.com, ECB: Jan Becke; p. 12 – 13: Summit pictures: Axel Gaube, Kaleidomania, SAFE pictures: Paint.NET v3.5.11; p. 16: private; p. 18 –9: clockwise: Rene Spalek / photography, private, private, Mario Andreya / Deutsche Bank AG; p. 21: Zaitsev Alexander / iStock; p. 22: clockwise: private, mstyslavchernov.com / wikipedia, wikipedia; p. 23: Wonge Bergmann for 360 Treasury Systems AG; p. 24: private, Andreas Wolf, private, city of Frankfurt am Main; p. 25: row: private, Summit: Axel Gaube, Kaleidomania; p. 26: row: Paint.NET v3.5.11, wikipedia, Bernhard Ludewig; p. 27: both Bernhard Ludewig

Frankfurt – Anchor of stability in the financial crisis

A financial centre of international importance ❙ Official start of renminbi trading in November 2014

❙ Visit of the Chinese rating agency Dagong Global Credit in May 2015 and decision in November to open an office in Frankfurt

❙ Frankfurt attracts new foreign banks:

- PKO Bank Polski, Poland’s leading universal bank, in March 2015

- KT Bank AG, a subsidiary of Kuwait Finance House owned Kuveyt

Türk Participation Bank A.Ş., lstanbul, in July 2015, the first Islamic

bank in Frankfurt

❙ Opening of offices of international systemically important banks such as of Banco Bilbao Vizcaya Argentaria (BBVA)

❙ Frankfurt attracts the Global Legal Entity Identifier Foundation (GLEIF)

Frankfurt city views: Stock Exchange, Alte Oper, Justitia on the Römerberg, bank buildings

Finanzplatztag 2015Press conference on the settlement of the Global Legal Entity Identifier Foundation (GLEIF) with representatives of the Hessian state government

Competition among the world’s financial centres has further inten-

sified in the financial and sovereign debt crisis. At the same time,

Frankfurt can rely on the stability of its financial centre, even in this

environment, because of the sheer breadth and depth in the services it

offers. This is reflected in the fact that the number of banks in Frankfurt,

both domestic and foreign, has remained stable during the crisis. The

German financial sector has been able to secure the supply of credit to

companies at all times.

Frankfurt stands for stability:

❙ The German financial sector is closely interwoven with a healthy and prosperous real German economy.

❙ The financial centre is home to the European Central Bank and the Deutsche Bundesbank and is considered the centre of monetary stability in Europe.

❙ The stock exchange trading platforms and IT systems in place in Frankfurt are valued worldwide for their security and stability.

❙ Three of the five European financial supervisory bodies are lo-cated in the financial centre, making Frankfurt the most important centre for the exchange of European financial supervisors.

❙ The location has a unique approach to promoting and expanding knowledge about risk management and regulation.

3,547 BILLION EUROSWAS THE SUM OF THE TOTAL ASSETS OF THE BANKS AT THE FRANKFURT FINANCIAL CENTRE IN 2014

A N N U A L R E P O R T 2 0 1 54 FINANCIAL CENTRE 5

Topical information about the financial centre ❙ Informed analysis is available from Helaba, one of the leading

banks in the financial centre. To find it online, go to www.helaba.de and navigate to Markets and Trends.

❙ Twice a year, the Global Financial Centres Index (GFCI) publishes a ranking of the world’s financial centres. Frankfurt is currently in 14th place (as of September 2015).

Facts and figureson the financial centre

Total employed in Frankfurt: 650,000

Total number of credit institutions: 202

Employed at credit institutions: 62,600

of which foreign banks: 161

Eurex: Importance in Europe: 1ST PLACEEurex: Importance worldwide: 3RD PLACE

The study “Financial Centers 2025”, compiled in June 2015 by the

WHU Otto Beisheim School of Management, analyses the future role of

the most important financial centres around the world, with a particu-

lar focus on the Frankfurt financial centre. Its findings: Important fac-

tors such as the strength of the local infrastructure, the ability to

attract important public authorities, banks and academic insti-

tutions and the quality of life that the city offers strengthen Frank-

furt’s role as a major financial centre.

The futureof financial centres

Tarek Al-Wazir is Hessian Minister of Economics, Energy, Transport and Regional Development and a member of the Frankfurt Main Finance Executive Committee.

“The Frankfurt financial centre is an

important factor in the success of the

economies of both the state of Hesse and

Germany as a whole. Sustainable growth,

competitive SMEs and once-in-a-century

tasks such as the energy transition or the

modernisation of infrastructure can only be

managed with a solid and strong financial

sector. That’s why the state government supports the

financial centre initiative Frankfurt Main Finance and will continue to

work with undiminished effort to ensure that the financial sector can

fulfil its economic function in the public interest.

A N N U A L R E P O R T 2 0 1 5FINANCIAL CENTRE 76 FINANCIAL CENTRE

Since 2008, Frankfurt Main Finance has been the voice of the

Frankfurt financial centre. In addition to the state of Hesse and the

cities of Frankfurt am Main and Eschborn, its more than 40 mem-

bers include many well-known financial market players and their service

providers, as well as private and public universities. With their member-

ship, they each give voice to their close ties to the financial centre and

their desire to position Frankfurt am Main effectively as a national and

international financial centre of the first rank. Frankfurt Main Finance

pools the strengths of the players

in the financial centre, mar-

kets the location and cre-

ates high-profile platforms

for dialogue.

Frankfurt Main Finance: With one voice for Germany’s leading financial centre

Major players in the financial centre

Regular members of Frankfurt Main Finance e.V.:

Sustaining members:

I N SE L N DE R AU F M E R K SA M K EI T

K o m p e t e n z n e t z w e r k

V e r s i c h e r u n g s w i r t s c h a f t

international financial centre of the first rank. Frankfurt Main Finance

pools the strengths of the players

in the financial centre, mar-

kets the location and cre-

ates high-profile platforms

for dialogue.

Sustaining members:

K o m p e t e n z n e t z w e r k

V e r s i c h e r u n g s w i r t s c h a f t

Dr. Lutz R. Raettig, Spokesman of the Executive Committee at Frankfurt Main Finance Revised February 2016

ICF BANK

WM Gruppe

A N N U A L R E P O R T 2 0 1 58 FRANKFURT MAIN FINANCE E.V. 9

Centre of European financial market supervision

Profound expertise in risk management and regulation

Founded in 2009 on the initiative of Frankfurt Main Finance, the Frank-

furt Institute for Risk Management and Regulation (FIRM) has

established itself within a few short years as a respected authority for

research and education with a focus on risk management, regulation

and supervision. Extensive research funds have been tendered and

awarded. Current projects are looking for example at the reputations

of rating agencies or the procyclicality of various accounting standards.

Every two years, FIRM also awards a research prize for the best aca-

demic dissertation on the subject of risk management and regulation –

including compliance – of financial institutions.

Frankfurt is the most important centre for the exchange of European

financial supervisors – clear evidence of the outstanding expertise

and well-educated people available in Frankfurt. The city is home

to major pillars of the European system of financial market supervision:

the European Central Bank (ECB) and the European Banking Au-

thority, the European Systemic Risk Board (ESRB) and EIOPA,

the European Insurance and Occupational Pensions Authority.

Wolfgang Hartmann is Chairman of the Management Board of the Frankfurt Institute for Risk Management and Regulation (FIRM).

The headquarters of the European Systemic Risk Board (ESRB) and the European Insurance and Occupational Pensions Authority (EIOPA)

The European Central Bank on the banks of the River Main “The presence of the regula-

tory authorities in Frankfurt

strengthens both the financial sector

and the infrastructure of the financial

centre in the long term. Frankfurt’s

profile as a regulatory centre also

continues to be raised by its ability to

attract other institutions of European

financial supervision to the city.

CMYK Werte Rot — 0/100/63/29Grau —10/0/0/65

A N N U A L R E P O R T 2 0 1 510 TOPICS AND ACTIVITIES: REGULATION 11

Founded in January 2013 at Frankfurt’s Goethe University, the

Sustainable Architecture for Finance in Europe (SAFE) Cen-

tre of Excellence is dedicated to research and policy advice in

the area of finance. SAFE is working to position itself as a leading

research centre in Europe, seeking to cover all areas that are rele-

vant to the development of a sustainable financial architecture:

research, policy and education and training. With its comprehensive

approach, SAFE is making a pivotal contribution to prudent, well-

informed policy making.

SAFE Inaugural Event

Jim Yong Kim, President of the World Bank, at the SAFE Policy Center

In February 2015, the Global Le-

gal Entity Identifier Foundation

(GLEIF) commenced operations

in the financial centre. Legally es-

tablished in Basel, Switzerland,

on the basis of a decision of the

G20, this international foundation

is considered a key institution for

the prevention and mitigation of

future financial crises.

Effective moderation of debates:

another major concern of the

Frankfurt financial centre, which

makes its expertise and network

available for events such as the

Frankfurt Finance Summit,

which was successfully initiated

by Frankfurt Main Finance and

FIRM for the fifth time in March

2015. The event brings together

top decision-makers from banks,

central banks, insurance compa-

nies, regulators, stock exchanges,

politics and the academy once a

year to discuss current issues

relating to risk management and

regulation. The focus of the 2015

conference was on various issues

under the heading “Reality check –

how to foster growth in the new

regulatory landscape”.

“ THE FRANKFURT FINANCE SUMMIT

HAS FIRMLY ESTABLISHED ITSELF AS A PLATFORM FOR DIALOGUE CONCERN-ING THE FUNDAMENTAL ISSUES FACING THE FINANCIAL CENTRE AND BEYOND.

Frankfurt Finance Summit 2014

Volker Bouffier, Hessian Minister-President, and Dr. Lutz R. Raettig of Frankfurt Main Finance during the presentation of the 2014 Yearbook at the 2014 Financial Centre Conference

Frankfurt Finance Summit 2015

Frankfurt Finance Summit 2015

A N N U A L R E P O R T 2 0 1 512 TOPICS AND ACTIVITIES: REGULATION 13

From Frankfurt am Main, important European cities are within easy reach.

China Daily, 9 December 2014

Börsen-Zeitung, 21 August 2015

With its geographical location in the heart of Europe, Frankfurt

is a city with an international perspective. For centuries, the

city has been the most important transport hub in Europe and

one of the world’s most important trading and exhibition centres. All of

these factors combine to make the Frankfurt Rhine-Main region one

of the most important economic areas on the continent – and a

region with high quality of life for its residents.

Frankfurt Main Finance works continuously to integrate the city even

more closely and to offer platforms for dialogue. Much has already been

accomplished here, as reflected in the international press coverage and

the growing number and quality of partnerships and collaborations.

The financial centre in the media

International New York Times, 17 March 2015

ChinaContact, November 2014

AHK Magazine No. 3 2015

Moscow

Istanbul

Zurich

Milan

Frankfurt

Berlin

ParisLuxembourg

London

Dublin

2 h 1h

Frankfurt – Europe’s hub

Börsen-Zeitung, 21 August 2015

Jornada informativa “Renminbi ClearingHub Frankfurt/Main”, organizada el 16 de ju-nio de 2015 por iniciativa de Frankfurt MainFinance e.V. en colaboración con la Cámarade Comercio Alemana para España, ha susci-tado un gran interés. El objetivo del eventoera presentar conjuntamente con el Ministe-rio de Hesse de Economía, Energía, Transportey Desarrollo Regional, la sucursal del Bank ofChina en Frankfurt y el Deutsche Bundesbank(Banco Federal Alemán) el RMB Hub enFrankfurt, con especial enfoque en el clearing

y sus ventajas.

En la jornada, destacados expertos informa-ron sobre las oportunidades de realizar trans-acciones comerciales en renminbi tanto parabancos como para empresas. El evento diouna visión global sobre las medidas que pue-den adoptar empresas en sus operacionescomerciales en renminbi a fin de lograr unosahorros considerables. En el caso de los

bancos se explicó cómo estos pueden asesorary apoyar a sus clientes para realizar el clearing

de la moneda china renminbi a través del cen-tro financiero en Frankfurt. En noviembre de2014 Frankfurt se convirtió en el primer clea-

ring hub de la zona euro. Actualmente 50 ban-cos ya han abierto una cuenta en el banco declearing en Frankfurt. La plataforma Renminbiofrece claras ventajas tanto para empresas co-mo para bancos de comercio e inversión.

En Frankfurt, las empresas pueden realizar sustransacciones con sus socios comerciales chi-nos como siempre, a través de su banco habi-tual en España. Independientemente en québanco español mantengan su cuenta en ren-minbi, las empresas pueden beneficiarse delclearing en renminbi a través de Frankfurt. Poreste motivo, el banco español tiene que man-tener una cuenta en el Bank of China ubicadoen Frankfurt, que a su vez tramitará las opera-ciones en renminbi. La novedad consiste en

que hasta hace poco los pagos en renminbi sepodían realizar solamente en un reducido nú-mero de centros financieros, especialmenteHong Kong. En España todavía no se puedenrealizar operaciones en renminbi.

La moneda china renminbi (RMB) gana cadavez más importancia. Aparte del dólar y eleuro se prevé que el RMB se establezca comola tercera gran moneda global. Un númerocreciente de empresas chinas prefiere emitirsus facturas en renminbi. Según una estima-ción prudente de los expertos, las empresasespañolas podrían ahorrar 103 millones deeuros. España se ha convertido en un impor-tante socio comercial para China. El balancecomercial de ambos países se elevó en 2014a 20.600 millones de euros.

Simone Schlussas

La CámaraAlemana informa

economía HISPANO - ALEMANA

Nº 3/2015

La

De izq a dcha: Jochen Biedermann (Frankfurt Main Finance e.V.), Robert Koller (Simmons & Simmons LLP), Joaquin Sales (King & Wood Mallesons LLP), Horst Seissinger (KfW Group)

Primer clearing hubde renminbi en lazona euro

www.frankfurt-main-finance.com

+info

International New York Times,

1 | TUESDAY, MARCH 17, 2015 INTERNATIONAL NEW YORK TIMES.

ADVERTISING SUPPLEMENT

PROFILE | Building core strengths

Nerve centerof a pan-Europeanbanking union

Frankfurt: Global financial hub

VIEWPOINT | Bernd Meist, managing director, Bank of China, Frankfurt

Trading on the city’s renminbi advantage

Finance Summit focuses on growth and regulationThe fifth annual installment of the Frankfurt Finance Summit takes place thisyear on March 16-17. Its theme is ‘‘Reality Check: How to Foster Growth inthe New Regulatory Landscape.’’ Organized by Frankfurt Main Finance inconjunction with the Frankfurt Institute for Risk Management andRegulation, it is one of Europe’s premier events for senior financialexecutives, policy makers and academics to exchange ideas in the areas ofregulation and risk management. This year, it welcomes 200 invited guests.

Among the keynote speakers at the event are Jonathan Hill of theEuropean Commission; Ulrich Grillo, president of the Federation of GermanIndustries; Adair, Lord Turner of the Institute for New Economic Thinking;Anshu Jain, co-CEO of Deutsche Bank; Richard Holmes of StandardChartered Bank; José Manuel González-Páramo of the Spanish banking groupBBVA; and Reto Francioni, the outgoing CEO of Deutsche Börse.

FINANCIAL SECTOR | Reasons to be upbeat

As Europe and Germany’s economies stabilize, Frankfurt’s finance sector looks at growth

L ast November, the Bank of China’sFrankfurt office became the first bankin the eurozone to offer trading and

clearing of China’s renminbi currency. BerndMeist, the bank’s managing director, sumsup the first four months of business.

What’s different in the city now that cli-ents can bank renminbi?

There is a new awareness of Chinesebusiness opportunities. I have long believedthat China should be on the agenda of se-nior management at top companies. It isnow, for those for whom it had not been. Itwas an eye-opener.

Are you satisfied with results so far?Yes. I think we are now approaching 50

banks with accounts. We have all of the topbanks — that’s a great accomplishment.Do you know how much paperwork goes in-to starting new accounts in Frankfurt? Andit’s still early days.

Only 50 customers?There was a lot of media hype, but to

change payment systems in a bank is a lotof work — you have to change structures.You don’t change structures in a bank over-night. And these 50 banks have a greatreach into corporates, therefore we canalready cover the relevant market in itsentirety.

How important is renminbi going to bein a couple of years?

Renminbi use will grow with actual tradevolumes. Two years ago, bilateral trade be-tween Germany and China was about ¤140billion [$157 billion]. Last year, it was, say,¤150 billion, and the goal is for it to reach¤200 billion. So you can see the mo-mentum. Plus, the number of players usingrenminbi is growing. Say it was 10 percent to15 percent of that ¤140 billion in 2013. Itmight be 30 percent to 50 percent when wereach ¤200 billion.

What are the chief advantages of hav-ing RMB accounts?

If Chinese customers can pay you in their

W hen the European Union expandedeastward to include Croatia in July2013, it put Frankfurt am Main 40

kilometers, or 25 miles, from the new geo-graphic center of the 28-member bloc.

Frankfurt, a bustling city in the center ofthe larger Frankfurt/Rhine-Main Metropolit-an Region, was already the undisputed fi-nancial hub of Germany. Its international air-port had long made it a global transit pointfor millions of travelers from around theworld.

But then two key events happened thatunderscored Frankfurt’s core position in anexpanding Europe. And they are already pro-pelling Frankfurt into a future that seemeddistant in 2011, when E.U. leaders and Croa-tia signed the accession treaty.

The first was in October 2013, when theEuropean Parliament voted to adopt aSingle Supervisory Mechanism (SSM) tooversee E.U. banks. The European CentralBank, located in Frankfurt since 1998,would lead the regulator.

The next, which followed in June 2014,was even more significant. China’s centralbank awarded Frankfurt the first license onthe Continent to conduct transactions di-rectly with its mainland in its national cur-rency, the renminbi (RMB).

ECB looming larger

In November, the same month in whichthe Bank of China office in Frankfurt openedits first RMB-denominated accounts, theEuropean Central Bank moved into a dra-matic, 45-story skyscraper overlooking theriver Main. That building was already toosmall to accommodate the unexpected extra1,000 employees who have since been hiredto work for the SSM regulator, now keepingtabs on Europe’s most important banks.

‘‘In this sense, at least, Frankfurt is abeneficiary of the global crisis,’’ says UlrikeBischoff, a researcher at the Helaba bank.But the SSM is only the first step in the Euro-pean Commission’s plan for an E.U. bankingunion. ‘‘With the expansion of the Europeanregulatory and supervisory architecture,’’says Bischoff, ‘‘the financial center of Frank-furt will advance to become the capital ofEuropean financial supervision.’’

This poses many challenges for munici-pal authorities. ‘‘It means investment in ad-ditional road construction,’’ says Frankfurt’smayor, Peter Feldmann, ‘‘for instance, con-

nections to the new ECB headquarters in theEast End. Our city planning is also striving forhousing, education and leisure capacities toprovide adequate life balance.’’

As increasing supervisory functionstransform Frankfurt from a German finan-cial hub into the nerve center of a pan-European banking union, there are someconcerns.

Stephan Bredt, a director general at theeconomic ministry of Hesse, the state inwhich Frankfurt is located, says that moreoversight and stricter requirements forbanks should not work against Germany’ssystem of smaller public, private and co-operative banks, which are critical for smalland medium-sized businesses. ‘‘We have to

be sure that this system is handled fairly bynew regulations,’’ he says.

Andreas Povel, general manager of theFrankfurt-based American Chamber of Com-merce in Germany, who worked for over 30years in the finance sector, agrees: ‘‘It ismore important to have fewer but more ef-fective and stringent regulations than manyimpractical and inefficient ones.’’

Historic agreement

There are no such reservations aboutFrankfurt’s newly acquired status as a clear-inghouse for RMB transactions. ‘‘This wasthe first time in history you had all the banksand the policymakers here in Germanyagreeing on something,’’ observes Bernd

Meist, managing director of the local officeof the Bank of China, which is providing RMBservices to banks. He has hired more than200 people and says banks opening ac-counts have to staff up, too, to manage newproducts denominated in RMB.

Though RMB trading is also available inLondon, and Paris and Luxembourg arebeefing up facilities, Frankfurt’s role isdestined to be pre-eminent, based on Ger-many’s lead in Europe in trade with China.

‘‘We think this is an important growthsegment for the next few decades,’’ saysBredt of Hesse’s economics ministry.‘‘When Chinese companies invest outside ofChina, we want Frankfurt to be their gatewayto Europe.’’

n

W hen things go well in Europe, andespecially in Germany, Frankfurt’soutsized financial sector tends to

do well also. So when the European Com-mission last month raised its 2015 growthforecast for the European Union from 1.5percent to 1.7 percent — and Germany’sfrom 1.1 percent to 1.5 percent — the moodwas upbeat.

‘‘Our financial sector is characterized bymaking money on German and Europeancompanies working in the global economy,’’says Stephan Bredt, a director general inthe economics ministry in the German stateof Hesse, where Frankfurt is located. ‘‘Otherfinancial hubs may be focused more oncapital-market transactions. But becauseFrankfurt’s financial center relies on, amongother things, corporate financing, it is

positive when the German and Europeaneconomies are thriving.’’

Frankfurt’s banking business dominatesthe local economy. There are 223 banks inthe city, with a combined balance sheet ofabout ¤3.9 trillion ($4.36 trillion). Theyprovide jobs for some 62,200 people.

More optimism

While this is almost 3,000 fewer than be-fore the financial crisis of 2008, still, heretoo, there is optimism: ‘‘The number of em-ployees working in banks and at the stockexchange has stabilized at a high level,’’says Peter Feldmann, Frankfurt’s mayor.

Using local employment figures — asopposed to balance sheets — is a goodway to understand who the major playersare in Frankfurt. The biggest are

New online databasefor potential partnersA new resource for companiesoutside of Germany interested indoing business in the country’sfinancial capital is now availableonline. Called Frankfurt – Partnerfor Growing Financial Centers, thedatabase was launched last year.It contains extensive informationon local companies involved in allaspects of the financial sector.

The English-language databaseis structured according to variousbranches of the business. Theservice is provided by FrankfurtMain Finance. Find it online at:www.frankfurt-main-finance.com/en/financial-centre/data/financial-centre-model/

Commerzbank, with some 13,000 employ-ees; Deutsche Bank, with about 10,000; DZbank, with about 6,000; and state-ownedHelaba, with about 5,000. These four institu-tions, all German, are responsible for abouthalf of the total banking jobs in the city.

Of Frankfurt’s 223 banks, 196 are for-eign, with more on the way, say businesspromotion agencies. Non-German banks inFrankfurt have smaller offices. Two of thebiggest, Switzerland’s UBS and France’sBNP Paribas, have fewer than a thousandemployees each in Frankfurt, though globallyBNP Paribas has some 200,000 workers.

They are expanding. Last year’s appoint-ment of Frankfurt as the Continent’s soletrading center and clearinghouse for Chineserenminbi saw a staff increase in the People’sBank of China, which is adding 200 jobs.

Last month, UBS, Switzerland’s largestbank, was reported to be considering con-solidating all of its E.U. businesses into oneunit, probably located in Frankfurt. UBS hasfewer than 1,000 employees at its Frankfurtoffice, but over 60,000 worldwide.

‘‘Market participants are coming toFrankfurt for the first time in order to lever-age business potential,’’ says UlrikeBischoff, a researcher at Helaba bank, ‘‘orare converting their local office into an oper-ational branch.’’

Many financial-sector employees don’twork for commercial banks at all. Ger-many’s central bank, the Deutsche Bundes-bank, is the largest institutional force, with3,600. But as the European Central Bankacquires more regulatory responsibilities, itsstaff of 1,600 is growing fast.

The other institution looming large isDeutsche Börse AG, the company that ownsthe Frankfurt Stock Exchange. Its 1,600 em-ployees are regarded as working for one ofthe most stable, efficient and cost-effectiveclearing and settlement systems in all ofEurope. Trading volume on the FrankfurtStock Exchange hit a record high last monthat 11,158 points after news that Europeanfinance ministers had accepted Greece’s re-vised reform plans.

Deutsche Börse’s chief executive officer,Reto Francioni, will step down in May afterhaving run the company since 2005. Takingover is Carsten Kengeter, former head ofUSB’s investment bank. Plans for the futureinclude opening a Deutsche Börse clearing-house in Singapore as part a new strategyfocused on Asia.

n

national currency you have a competitiveadvantage, because there are still restric-tions for Chinese companies paying in for-eign currencies. You are in a better positionto negotiate. Also, our customers can com-plete transactions in their own time zone.You don’t have to call in the middle of thenight. The whole process is easier and lesscomplex, because we now deal directly withthe mainland — we have cut out Hong Kong.Finally, with an RMB account, there are morethings you can do with the currency. Thereare more opportunities.

Are you an authority on Frankfurt’sChinese restaurants yet?

Depends on whether you’re talking aboutnorthern or southern cuisine…. No, serious-ly, this is a very exciting job. It is a differentculture, and we are one of the few banks inthe world that are really growing, and in par-ticular in Germany.

n

Bank of China Franfurt’s managing director,Bernd Meist: ‘‘There are more opportunities.’’

Frankfurt, with its medieval core andmodernist skyline, is the pivot point

for new departures in Europeanand global finance.

Creating and deploying innovative financing productsThe financial community, civilservants and economic promotionagencies in Frankfurt are allexploring new ways to do what thecity does best: move money.

Last month, Frankfurt-basedDeutsche Bank announced a plan toinvest ¤1 billion ($1.10 billion) in aportfolio of highly liquid assets inthe form of green bonds. The bankhas already put ¤200 million intogreen bond investment.

Used to finance environmentalprojects, the relatively new greenbonds are fast becoming popular.Bloomberg estimated that about$14 billion worth of green bondswas issued worldwide in 2013, thesame volume reached in only thefirst six months of 2014.

Growing infrastructure,combined with higher borrowingcosts, is also creating demand forinnovations in municipal finance.Though traditional loans from localbanks remain key financing vehiclesfor the city, those same banks areincreasingly withdrawing from long-term municipal lending. ThusFrankfurt is attracting a new groupof creditors by issuing promissorynotes for shorter terms and bondsfor longer terms.

In addition, Frankfurt EconomicDevelopment, the city’s businessdevelopment agency, created the¤3 million Frankfurt Startup Fund toencourage new businesses. Itprovides loan guarantees of up to¤50,000, plus advice and coaching.

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Media Partner:

A N N U A L R E P O R T 2 0 1 514 TOPICS AND ACTIVITIES: INTERNATIONAL RELATIONS 15

Partnerships and collaborations

Frankfurt Main Finance works hard to establish international

networks and intensify proven collaborations. The emerging

markets belong to the most important partners, and the initiative

has taken part in delegations to the following destinations:

Busan in South Korea, Beijing and Shanghai in China, Hong Kong, Oman,

Abu Dhabi in the UAE, Pretoria in South Africa and Mozambique, Istanbul

in Turkey, Singapore and Tokyo in Japan.

Contents: ❙ Busan: Agreement on closer cooperation in the area of derivatives

trading and maritime financing

❙ Beijing and Shanghai: Reinforcement of the position of Frankfurt as the renminbi trading centre in Europe

❙ Hong Kong: Participation in the Asian Financial Forum (AFF)

❙ Istanbul: Provisional appraisal of the memorandum of understand-ing signed in September 2012, whose goal is to establish economic cooperation in the development of Istanbul as a financial centre

The world comes to Frankfurt ❙ In April 2015, representatives of TheCityUK visited Frankfurt

with the goal of establishing an Anglo-German financial services dialogue.

❙ A business seminar on the subject of data security in the financial sector was held in May 2015, organised by the Indian Consulate General and supported by Frankfurt Main Finance.

❙ In October 2015, Luxembourg for Finance and the Börsen- Zeitung organised the panel discussion “Luxembourg and Frankfurt financial centres: responsibility for the future”, with Frankfurt Main Finance taking part in the discussion.

❙ Together with the Hessian Ministry of Finance, Frankfurt Main Finance organised a roundtable discussion on the topic of “New ways for better financing of capital markets union in Europe”. The event took place in November at the European Commission, and featured Lord Jonathan Hill, Commissioner for Financial Stability, Financial Services and Capital Markets Union.

An attractive location for foreign banks

The financial sector abroad continues to see Germany as an attrac-

tive location. The factors in favour of Frankfurt in particular include the

European Central Bank’s assumption of responsibility for the super-

vision of the 120 largest banking groups in the euro countries,

which unifies and strengthens the European internal market for financial

services. Frankfurt offers a stable market environment – as demonstrated

by the trends in total assets and employee numbers, the number of

institutions represented in the financial centre and the city’s ability to

attract new foreign banks. There are currently 186 foreign financial

institutions based here.

Frankfurt Main Finance represents the financial centre at the Istanbul Finance Summit.

Dr. Raettig in conversation with Busan’s Mayor Byung-soo Suh

A N N U A L R E P O R T 2 0 1 516 TOPICS AND ACTIVITIES: INTERNATIONAL RELATIONS 17

?Since November 2014, companies in Germany and the entire eurozone can process their payment transactions

in renminbi through Frankfurt on the same day. Until then, these transactions were only possible through selected financial centres in Asia, particularly Hong Kong. What are the advantages that Frankfurt offers in competition with other European trading centres?

“Frankfurt has been home for many years now to a regional con-centration of Chinese companies, and it is also one of the leading

financial centres in the eurozone. With the offshore clearing centre at the Frankfurt financial centre, it provides the infrastructure required for fast and reliable renminbi payment transactions and trading. Our SME cus-tomers in particular benefit from this new offshore clearing centre. With a clearing house more or less “directly on their doorstep”, they can now manage their insurance products.

Stefan Zeidler, Member of the Board of Managing Directors for Corporate Clients at DZ BANK AG

?What are the benefits of renminbi clearing for SME customers?

“ It means that companies are no longer forced to rely on the Asian centres in Hong Kong or Shanghai, whose use was often consid-

ered less attractive because of the time difference, particularly for pay-ments within Europe. It also means that business with China in renminbi can be managed more simply, directly and cost-effectively, and with less risk. This is gaining in importance, especially given the increasing rele-vance of the renminbi as a trading, investment and reserve currency. In 2015, for example, almost 30% of cross-border trade with China was paid in renminbi. And outside the European Union, China is the most important trading partner for German companies.

Rainer Bender, Deutsche Bank AG, Head of Corporate Banking Coverage (CBC) Germany

A trading centre gathers pace

? Together with the Shanghai Stock Exchange and the China Financial Futures Exchange, Deutsche Börse has

established the joint venture CEINEX. How do investors benefit from the new trading platform?

“Since mid-November 2015, CEINEX – the China Europe Interna-tional Exchange – has been offering products based on Chinese

underlyings to international investors, starting with spot market products. The new marketplace is the first international and regulated marketplace for trading investment products denominated in renminbi outside the People’s Republic of China, opening up attractive new options for the efficient trading of Chinese assets to investors, and therefore effectively promoting the internationalisation of the Chinese currency. Jianhong Wu, Member of the Board of Deutsche Börse AG

?In 2014, KfW listed a renminbi bond on the Frankfurt Stock Exchange for the first time, having previously

issued an equivalent bond in Luxembourg. Why did you choose Frankfurt for the more recent bonds?

“Germany and China have agreed to make Frankfurt a hub for renminbi trading in Europe. KfW is a firm supporter of the initia-

tive of the Frankfurt financial centre, as the listing of its renminbi-denom-inated bonds on the Frankfurt Stock Exchange demonstrates. KfW refi-nances itself on the world’s capital markets and is a major international issuer of bonds. With our Frankfurt-listed RMB bonds, we offer investors the unique combination of an investment in RMB with our excellent credit rating. We are confident that the renminbi will gain in importance as an investment currency in the future.

Alexander Liebethal, KfW Group, Capital Markets

A N N U A L R E P O R T 2 0 1 518 TOPICS AND ACTIVITIES: RENMINBI 19

The area of financial services technology – the FinTech sector – is

currently where Frankfurt catches up fast. Throughout 2015 the

number of Frankfurt based FinTech companies is doubled to over

50. The Frankfurt financial centre offers young financial technology com-

panies attractive working and living conditions. And proximity to the es-

tablished banks is an advantage for young start-ups. In early 2015, the

city launched the “Frankfurt Forward” initiative to promote cooperation

between start-ups and established companies in the sector. The state

of Hesse has moderated the process to select and commit to a Frank-

furt FinTech Center.

The community is growing together

DVFA, Main Incubator, Unibator, FinTech Meets and others bring together

start-ups and investors. “Between the Towers” became a monthly fixture

for FinTechs and the Finance Industry to meet. Frankfurt Main Finance

has set up the Dialogforum FinTech in which 44 actors exchange ideas

and coordinate their activities in fields like services for fintechs, financ-

ing, marketing, regulation, international partnerships, research & aca-

demics, networking and the setup of a strong fintech hub in Frankfurt.

“ FRANKFURT HAS ATTRACTED FINTECH COMPANIES THAT

EASILY BEAR COMPARISON WITH COMPETITORS IN LONDON OR BERLIN.

FinTech:Frankfurt offers more

A N N U A L R E P O R T 2 0 1 520 TOPICS AND ACTIVITIES: FINTECH 21

Reliable partnerships

In October 2015 leading Korean FinTech companies including YAP Global,

Finotek, Yello Finance Group and Datastream corp. visited the Frank-

furt financial centre, led by member of the Korean National Assembly

Kim Jung-hoon. A number of pioneering partnerships were agreed. In

addition to appointments with the KfWIPEX Bank and other Frankfurt

institutions, there was also a FinTech workshop organised by Frankfurt

Main Finance, which was attended by policy makers and representa-

tives of FinTech companies and Busan and Frankfurt universities. Both

financial centres see great potential in continued intensive exchange in

the FinTech sector.

“Frankfurt qualifies as a laboratory for marketable FinTech concepts

With 360T AG, a foreign exchange trading platform with revenues of

65 million euros, 225 employees at 26 locations and a selling price of

more than 725 million euros, Frankfurt can boast the biggest European

FinTech transaction of the year 2015. The company, founded 15 years

ago by Carlo Kölzer, has been taken on by the German Stock Exchange.

?Mr Kölzer, 360T managed the biggest FinTech trans-action in Germany in July 2015. To what

extent has your company benefited from being based at the Frankfurt financial centre?

“When we were starting out as a young FinTech company more than 15 years ago, we made a

very deliberate choice for Frankfurt because it provided, and still provides, fertile soil for our business – the interna-tional and cosmopolitan character of the city and its play-ers, plenty of dynamism and innovative spirit and not least a high quality of life, which is especially attractive to foreign employees. We felt confident right from the start that our business model would be successful here at the financial centre.

?What role does proximity to the regulatory authorities play for start-ups in the financial sector?

“Frankfurt is at the centre of Europe’s financial industry and has a unique approach to promoting and expanding knowledge about risk manage-

ment and regulation. And in the Frankfurt cluster region, competencies in the areas of regulation, financial supervision, risk management and legal and business consultancy are also closely linked. Frankfurt therefore qualifies as a laboratory for marketable FinTech concepts.

?Where do you see the biggest challenges for FinTech start-ups in Germany?

“Clearly in the area of regulation. Back then, we had problems because of our shareholder structure, had to find a new managing director, were

suddenly considered overindebted as a result of balancing our accounts in ac-cordance with the German Banking Act. Sometimes you feel like you’ve been left quite alone. Nobody says to you: You’ve got to do it this way or that way, so that we can approve it. There has to be regulation, but there is definitely still room for improvement.

The Korean financial metropolis of Busan, German Chancellor Dr. Angela Merkel and member of the Korean National Assembly Kim Jung-hoon in Frankfurt

A N N U A L R E P O R T 2 0 1 522 TOPICS AND ACTIVITIES: FINTECH 23

On 31 July 2015, the first football conference organised by Frank-

furter Allgemeine Forum and supported by Frankfurt Main Finance

kicked off a weekend during which sport really took centre stage

in Frankfurt city life. On the following Sunday, the Frankfurt Main Finance

Cup, held for the second year running, then lived up to the success of

2014 with the Eintracht Frankfurt vs. FC Tokyo game held as part of

Eintracht’s season opening ceremonies. In front of a crowd of around

50,000, the hosts sealed their victory with a 3-2 win. The evening be-

fore, the city of Frankfurt, Eintracht Frankfurt and Frankfurt Main Finance

had invited guests from the worlds of sport, politics and business to an

evening reception at Frankfurt’s Alte Oper concert hall.

Kick-off at the financial centre:Frankfurt Main Finance Cup

“Frankfurt is both a financial centre

and a city of sport at the same time,

which shows just how diverse our city on

the Main is. Although the emotional world

of football and the seemingly cool financial

world of numbers appear to have little in

common at first glance, the two fields com-

plement each other wonderfully and do in

fact have quite a lot in common. In both,

peak performance, teamwork and fair com-

petition are essential.

Show presence,demonstrate competence

The series of FinanceBreakfast events launched in 2014 by

Frankfurt Main Finance and VAB, the Association of Foreign Banks

in Germany, sharpens the focus on the importance of interna-

tional financial service providers as a key economic factor for Frankfurt,

the state of Hesse and Germany as a whole. To date, the breakfast has

been hosted five times:

❙ With Koichi Katakawa, Managing Director of Nomura International plc, German Branch

❙ With Carsten Brzeski, Chief Economist at ING-DiBa

❙ With Giovanni Sabatini, Managing Director of the Italian Banking Association

❙ With Arundhati Bhattacharya, CEO of the State Bank of India

❙ With Claudio Borio, Head of the Monetary & Economic Depart-ment of the Bank for International Settlements

As an association dedicated to the promotion of the financial centre,

Frankfurt Main Finance attaches particular importance to having a pres-

ence at key industry events such as the Börsen-Zeitung Financial

Centre Conference and Euro Finance Week. As part of the Finan-

cial Centre Conference in March 2015, the association presented its

2015 Yearbook, and its tape art performance on the subject of growth

at the stock exchange also caught a good deal of attention.

Uwe Becker is Treasurer of the City of Frankfurt and a member of the Frankfurt Main Finance Executive Committee.

Mayor Peter Feldmann and Dr. Lutz R. Raettig at the 2015 Financial Centre Conference (left), tape art performance by Frankfurt Main Finance (right)

FinanceBreakfast with Thorsten Schäfer-Gümbel, SPD Vice-Chairman and leader of the party block in the Hessian state parliament (left), Claudio Borio and Diana Rutzka-Hascher, President of the Regional Office of the Bundesbank in Hesse (right)

Members of The State Bank of India (left), the Frankfurt Finance Cup trophy, Axel Hellmann , Dr. Lutz Raettig and Heribert Bruchhagen (right)

A N N U A L R E P O R T 2 0 1 524 TOPICS AND ACTIVITIES: COMMUNITY 25

Centre of excellence for the financial economy: The Frankfurt School of Finance & Management

The Frankfurt School of Finance & Management (formerly Hochschule

für Bankwirtschaft) is a further top institution based in the city of Frank-

furt, as is regularly attested by numerous university rankings. A private

university with the right to award undergraduate, postgraduate and doc-

toral degrees, it is one of the most prestigious addresses for the edu-

cation of future managers and executives in the banking sector. More

than 50 professors, lecturers and language teachers currently cater to

the needs of around 1,500 students in state-recognised and FIBAA-

accredited bachelor and master degree programmes. The foundation

university is funded entirely from tuition fees, consulting fees and foun-

dation funds. The educational opportunities on offer include courses of

higher and further education, executive education programmes, sem-

inars and training courses, as well as individually tailored educational

and advisory services for businesses. The high quality of its work with

students is ensured by small groups, skilled and accessible teachers

and an excellent infrastructure.

The Frankfurt financial centre stands for excellent, practical research

and teaching in the fields of economics and finance, as is impres-

sively demonstrated by the research and training institutions based

here, as well as their close links with banks, insurance companies and

other financial service providers. Aspiring bankers and financial experts

can find excellent educational opportunities here.

Leading institutions include: ❙ Goethe University Frankfurt – House of Finance

❙ Frankfurt School of Finance & Management

❙ WHU – Otto Beisheim School of Management

And those who have already demonstrated their expertise in the finan-

cial sector still have to keep pace with the increasing levels of special-

isation in the industry. To meet this need, the financial centre offers

many opportunities for further education, ranging from postgradu-

ate programmes with a focus on investment research, asset man-

agement, wealth management, credit and property analysis through

work-study courses in the field of risk management to networks,

platforms and lecture courses for managers in the financial sector.

❙ Capital Markets Academy

❙ DVFA – German Association for Financial Analysis and Asset Management

❙ EDA – the vwd academy

❙ European Finance Forum e.V.

Specialised servicesfor every goal

Frankfurt School of Finance & ManagementHouse of Finance at Goethe University Frankfurt (left), WHU – Otto Beisheim School of Management and Frankfurt School of Finance & Management (right)

A N N U A L R E P O R T 2 0 1 526 TOPICS AND ACTIVITIES: ACADEMICS 27

Frankfurt Main Finance e.V.

Main Triangel

Zum Laurenburger Hof 76

60594 Frankfurt am Main

Phone: +49 (0) 69 94 41 80 31

Fax: +49 (0) 69 94 41 80 19

http://www.frankfurt-main-finance.com