UPDATE: 23 Cities Bidding For EMA, EBA Post-Brexit - EU

--Adds Frankfurt Main Finance comment, detail throughout

By Tara Oakes

     BRUSSELS (MNI) - A total 23 cities from across the European Union are

bidding to host one or both of the agencies destined to leave the UK after

Brexit.

     Of that, 19 cities have thrown their hat into the ring to be the new home

of the European Medicines Agency (EMA) and 8 for the European Banking Authority

(EBA).

     Brussels, Dublin, Frankfurt, Paris, Prague, Luxembourg, Vienna and Warsaw

all sent in applications to host the EBA before the deadline passed at midnight

on Monday.

     LUXEMBOURG

     Luxembourg have touted their credentials as a potential EBA host due to

experience of hosting agencies -- as well as tabling an offer to house the EBA

rent-free.

     A Luxembourg official on Tuesday could not confirm how long the offer of

free rent would stand for.

     "I think sorting out the precise aspects of all that will be something that

has to come up later in the discussion," he said.

     The official added that Luxembourg had the advantage of an already-existing

financial "ecosystem" with a large pool of potential future employees.

     "We are not talking about starting from scratch here," the official added,

stressing that the agency is already operational and could continue to be so

when Brexit hits.

     The small country can also lay claim to an arcane 1965 EU law which

intended that future institutions linked to the financial centre should in

principle be based in Luxembourg.

     But, the source said, they were unwilling to play the 1965 card this time

and launch a legal debate which could destabilize the unity of the 27 remaining

member states and slow down decision-making.

     FRANKFURT

     Fellow heavyweight contender Frankfurt also have the historical precedent

card to play: they are already home to the European Central Bank (ECB), the

European Insurance and Occupational Pensions Authority (EIOPA), and the European

Systemic Risk Board (ESRB).

     For Hubertus Vaeth, Managing Director of Frankfurt Main Finance, the

addition of the EBA to the mix would be a "very logical step" - particularly

since the extension of the ECB's mandate following the financial crisis to cover

a supervisory as well as a monetary role.

     "It has taken part of the function of the EBA into the ECB, so it would be

sort of odd to have it spread across two locations," he told MNI. Frankfurt have

not yet openly offered free rent on EBA premises to match Luxembourg, but it

"could be considered," Vaeth said.

     Vaeth added that the overlap between the duties of the EBA and ECB is "not

yet fully aligned" and that increasing their geographical proximity could create

"huge synergy" between the different bodies, helping to alleviate demands on

banks who currently face having to report the same information to both. 

     Given the overlap, some have mooted that the EBA could merge with one of

the other bodies for greater coherence at an EU level of supervision.

     The Luxembourg official said that this possible future outcome should not

be part of the consideration for where to put the EBA now. For Vaeth, the idea

was "interesting" -- and would only be possible if the EBA was housed in the

same location as one of the other supervisory pillars.

     Paris is the only fellow contender to house another one of the supervisory

bodies -- the European Securities and Markets Authority, or ESMA.

     DOUBLE OR NOTHING

     Dublin, Vienna, Warsaw and Brussels are also bidding to be home of the

larger EMA, which will be awarded first in the process. No country can host both

agencies, as per an agreement reached at the EU Council in June.

     Athens, Barcelona, Bonn, Bratislava, Bucharest, Copenhagen, Helsinki,

Lille, Milan, Porto, Sofia, Stockholm, Malta and Zagreb are also bidding for the

EMA alone.

     Some member states, notably the Baltic countries, haven't bid for either

agency.

     The European Commission will now assess the applications according to six

criteria and present their deliberations on September 30. The General Affairs

Council will then discuss the EC's findings and vote on the new homes for the

agencies in November.

--MNI Brussels Bureau; +44 203-865-3851; email: tara.oakes@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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