European Union cities such as Frankfurt, Dublin and Paris all made a bid for British banks after the UK decided to leave the bloc in 2016.
German Central Bank executive board member, Andreas Dombre, has claimed that banks are in the advanced stages of exiting from London as Brexit looms.
Mr Dombre told CNBC: “First of all, banks will not only relocate to Frankfurt, they will also relocate to other cities, Dublin is also the other large candidate.
“There will be firms going to Paris and also to Amsterdam, which is not bad, which means that the risk will be dispersed across the Eurozone and it won’t be in one city but also not in a huge and large number of cities.
Brexit news: Andreas Dombre claimed German banks were in the advanced stages of relocating
“We are not in a race with other cities about who gets what as the outcome of the referendum is still disappointing but has to be accepted.
Mr Dombre added that banks were preparing for a hard Brexit, in case talks collapse, but most banks were in the advanced stages of their relocation.
“Banks are planning on a hard Brexit because they do not know what the outcome is,” he said.
“I think that is a wise thing to do because you have to plan for the worsts case if you are not quite sure what the outcome is. It is not what you wish for but that’s what you prepare for.
“I have been in London very recently and spoken to some of those senior bankers and they are pretty advanced. Pretty advanced in their thinking. We are seeing here in Frankfurt, quite a number of applications and we are in very very close contact with those institutions.
Banks are planning on a hard Brexit because they do not know what the outcome is
“We are working with them to make sure there is a smooth transition. As smooth as possible and that we don’t run into any financial instability risk which I do not see right now.”
The comments come after last month the chief executive of Goldman Sachs was accused of ramping up project fear after suggesting the financial powerhouse would be leaving London.
Lloyd Blankfein Tweeted: “Just left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I'll be spending a lot more time there. #Brexit”.
Despite a number of banks moving some staff from offices in London to those on the continent, the majority of jobs are expected to stay in the City.
Nations putting the EU in danger
Mon, October 23, 2017
Euroscepticism is rising across the continent
AFP/. Images 1 of 7
Austria: The hard-Right Freedom Party (FPO) has previously been accused of xenophobia and racism
Michael Bloomberg, who once described Brexit as the "single stupidest thing any country has ever done,” admitted London would stay as a leading financial hub.
He told the Today programme: “London is always going to be the financial centre of Europe for the foreseeable future.
“It has the things the finance industry needs: it is English speaking, it is family-friendly, it has a lot of cultures so you can attract those people here.
“What will happen with Brexit is that some jobs will move – although they may have very well be replaced here – but the growth rate of London as a financial centre will certainly not be what it would be if Brexit didn’t take place.”
The billionaire's company recently opened its new £1billion headquarters in London, where 4,000 employees will work with room for an additional 4,000.
- Labour MPs jeer Frank Field for saying supporters want Brexit
- PMQs LIVE: Theresa May and Jeremy Corbyn set for showdown after Bre…
- Roars of laughter as Theresa May delivers stinging truth in PMQs