HSBC is threatening to move 1,000 of its investment banking jobs to Paris if the UK exits the European Union. It's not the only one - Goldman Sachs has also intimated that it might move thousands of jobs out of London if the UK exits the EU, with Paris or Frankfurt among the likely destinations.
Needless to say, however, there are good reasons for traders in London to resist a move to La Défense. And those reasons are almost entirely to do with pay.
Historically, you've been much more likely to earn big money working in an investment bank in London than in Paris. The most recent data from the European Banking Authority (for 2013), indicates that there are around 2,086 people in investment banks in London who earn more than €1m a year. In Paris, there are around 162.
Figures from pay benchmarking firm Emolument throw things into sharper relief for traders. Emolument says traders at analyst and managing director-level in Paris earn a comparative pittance compared to their counterparts in London. Emolument says MD-level traders in Paris command an average of €308k (£239k) and that analysts command €52k (£40k). In London, by comparison, pay is around 30% higher and you're far more likely to make really big money. 43 people in London earned more than €5m in 2013 according to the EBA. In Paris, no one did.
This might sound like good news for investment banks that want to save money. Why not shunt traders to Paris and cut pay? France is definitely making an effort - it's scrapped its 75% top rate of income tax and its economy minister (an ex-Rothschild banker) says it's ready and waiting for finance professionals to move from London. Except it's not that simple.
While trading jobs are mobile, sales jobs are not - as demonstrated by Credit Suisse's decision to keep sales and relationship positions in London when it shifted prime services trading jobs to Dublin last month.
One London-based headhunter who works closely with French banks says French firms like BNP Paribas situate their traders in London for a reason: "It makes sense from a cost perspective to have your flow traders and salespeople sitting together. London is much more cosmopolitan than Paris and it's difficult to find anything other than local French salespeople to work in La Défense."
Is HSBC making an empty threat? Not necessarily. Headhunters point out that the bank already has a substantial global markets trading operation in Paris. The UK-based bank inherited a fixed income trading unit in the French capital after acquiring Credit Commercial France in 2000 and has rates trading desks in La Défense. "HSBC could move traders to Paris, but they'd still need infrastructure and salespeople in London and they'd be doubling their cost base," says the headhunter.
Photo credit: Paris by Aitor Aguirregabiria is licensed under CC BY 2.0.