Which city will win the post-Brexit race to become the new London for high finance?

The race is on to be the new London.

Unless Britain finds a way to undo its decision to leave the European Union, London's days as the pre-eminent global financial capital, ranked even ahead of New York, may be numbered.

I spoke this week to several high-ranking executives at major financial institutions that collectively employ tens of thousands in London. While none of them have any immediate plans to move their European headquarters from Britain’s capital, all agreed they would eventually shift a significant number of highly paid employees to cities that remain in the European Union.

One executive in charge of relocation (who like the others, spoke only on condition of anonymity because of the political sensitivity of the issue) said the percentage of employees in his firm who might be required to move ranged from 10 percent to 40 percent. “Multiply that throughout the industry and it’s tens of thousands of people and their families,” he said. “And bear in mind that most of these people are millionaires.”

Who might win this high-stakes financial sweepstakes?

To handicap the race, I asked relocation experts at major firms to describe what they are looking for in a replacement for London. I also spoke to Mark Yeandle, a director of the Z/Yen Group in London and lead author of the Global Financial Centers Index, which ranks cities based on their attractiveness to financial services businesses. (Before last week's vote, London was far and away the winner.)

Here are the criteria most frequently mentioned: English-language facility, which is essential for attracting a global workforce; a favourable regulatory environment, especially regarding employment; excellent transportation and communications infrastructure; availability of prime office space and luxury housing; good schools; good restaurants and cultural offerings; and finally, an intangible quality that includes a certain energy level and openness to an influx of highly paid, competitive City of London-Wall Street types.

I scored numerous cities in the European Union on a 60-point scale: five points for office space and housing, five points for restaurants and cultural offerings — because it’s easier for any city to build new offices and housing, and import talented chefs and entertainers — and 10 points for each of the others.

For English-language facility, I used the European Union's 2012 survey, "Europeans and Their Languages." For the regulatory environment, I used the rankings from the World Bank. For airports, I combined on-time departure statistics with a leading passenger satisfaction survey.

To evaluate schools, I consulted Harriet Plyler, editor of "The Good Schools Guide International," and the Pearson Learning Curve Index. For restaurants, culture and quality of life, I used Mercer Consulting's Quality of Living Survey and a ranking of cities based on the number of Michelin-starred restaurants; for cost and availability of offices and luxury housing I used the Global Property Guide.

The Alternatives

Here, in ascending order, are the top nine, including the winner:

— Barcelona, Spain (23 points)

Several executives spoke wistfully of moving to sunny Barcelona, with its excellent restaurants, cafe scene, night life and proximity to Mediterranean beaches. But other than a relatively good airport, Barcelona fails nearly every other test, starting with English-language facility: Just 22 percent of Spaniards have a conversational knowledge of English. “Barcelona is great for a holiday,” Yeandle said, “but not as a place to do business.”

— Milan (24 points)

Much the same could be said of Milan. Italians are a little more fluent in English — 34 percent — and Milan has excellent restaurants and arguably the best shopping in the world. It's already Italy's financial centre. But it lags in every other category, including business climate, where Italy is ranked 45th by the World Bank. Its two main airports are badly in need of refurbishing.

— Warsaw (24 points)

Poland’s appeal is primarily its flexible labour laws, favourable business climate, a hardworking, well-educated populace and a low cost of living. Warsaw would welcome an influx of financial professionals with open arms, in contrast to many more affluent European cities. But it ranks very low on Mercer’s quality of life index, and luxury housing is limited. Still, one major banker told me his firm would move a contingent there from London and expand its technology operations, though its top investment banking professionals would balk at the idea of relocating there.

— Luxembourg (40 points)

Residents of Luxembourg are the most affluent and multilingual in Europe (56 percent speak English, and 84 percent speak at least two foreign languages). Known in part as a tax haven, it is already a sophisticated financial services centre, and is home to the European Investment Bank and the European Court of Justice.

Mercer ranks it relatively high on quality of life (19th in the world) and it has a surprising number of Michelin-starred restaurants, a reflection of its proximity to France.

But the World Bank rates its business climate last among these finalists. Its international airport ranks a dismal 99th. And the entire country had a population of just 576,000 at the beginning of this year. London has more than 360,000 employees in its financial services sector alone. It’s hard to imagine how Luxembourg could absorb even a small percentage of them.

— Paris (43 points)

Already a major financial services centre and easily the most culturally appealing city in the European Union, Paris seems an obvious choice. Its regional population of 12 million is the only one that rivals London.

But Paris’ score is dragged down by almost every other category. Only 39 percent of the French are fluent in English, and despite big improvements in recent years, they maintain a reputation of being inhospitable to people who don’t speak French well.

Its airports have low rankings and its rigid school system is inhospitable to foreigners (although it has excellent English-language private schools). France has strict limits on the ability to fire people, and it ranks just 27th on the World Bank’s list. Paris is among the most expensive cities in Europe after London, and is a distant 37th on Mercer’s quality of life index.

Every financial services executive I interviewed mentioned an intangible factor: French hostility to the wealthy. President François Hollande tried to impose a 75 percent “wealth tax,” which prompted an exodus of rich French citizens before Hollande dropped the proposal.

“All the noise coming out of the Élysée Palace the last few years has been that France wants to tax or regulate financial service companies out of business,” Yeandle said. “Financial services people are furious.”

— Dublin (50 points)

Not surprisingly, Dublin gets top scores for English-language facility (albeit with an Irish lilt), and also for excellent schools. Dublin is charming, with good restaurants, theatre and night life. It offers many of London's advantages, but is much less expensive. It ranks high on ease of doing business, and of all the European capitals, is probably the most enthusiastic about attracting high-paid talent from London. The IDA is already reaching out to financial institutions to entice them to Ireland, The Irish Times reported.

Several banking executives told me they would definitely be moving some operations to Dublin.

Dublin’s main drawback is its relatively small size (1.8 million people in the metropolitan area) and lack of infrastructure. Dublin is more distant from the European Union’s other countries and it lacks London’s direct rail link to the Continent. Its relatively small airport ranked 80th.

— Vienna (51 points)

Vienna emerged as a surprisingly viable contender. Seventy-three percent of Austria’s population is fluent in English; its rank in ease of doing business is just behind Ireland’s; Vienna has an excellent airport with high on-time performance, and it is Mercer’s top-ranked city in the world for quality of life. Its restaurants and wines have attracted international acclaim. “It’s a fantastic place to live,” Yeandle said.

Like Paris, Vienna has the air of a world capital, which it was until Austria lost its empire after the First World War. And that, bankers told me, is part of the problem: Vienna feels like it has been asleep for much of the last century. It's not a major financial capital now, and no one I spoke to has any immediate plans to start or expand operations there. Still, they told me they might have to reconsider.

— Frankfurt (54 points)

In many ways Frankfurt is the obvious choice, because it is already home to the European Central Bank. It's the financial capital of Germany, Europe's largest economy and dominant political force. It ranks high on the ease of doing business index, although German labour laws can be as rigid as the French's. After Heathrow outside London, it has the second-ranked European airport, next to a modern rail terminal connecting it to every major city in Europe. Its population of 2.5 million could absorb a large influx of financial professionals.

But some of those same factors work against it. Even as most people I spoke with said Frankfurt would most likely emerge as the next London, they didn’t seem very enthusiastic about it. Some already think there’s too much power in Germany — and that London has acted as a financial counterbalance.

And some said Frankfurt was simply too boring. It ranks low on the Michelin-star rankings (and far behind other German cities like Berlin and Munich) and isn't known for its night life or culture.

Language and schooling are potential drawbacks as well.

And the winner is:

— Amsterdam (55 points)

Not only do 90 percent of the Dutch speak English, many speak it better than the English themselves. Its schools are ranked the best in Europe, and there are plenty of English-language options. The city has beautiful architecture and housing options, picturesque canals, excellent restaurants, music and theatre, lively night life, and a cosmopolitan and tolerant attitude cultivated over centuries as a major global trading centre.

It has one of Europe's best airports, ranked just behind Frankfurt and Vienna, and an excellent rail network connecting major European capitals, including London. It's a short train ride to Brussels, the capital of the European Union.

Amsterdam is already a centre of international commerce and both the financial and political capital of the Netherlands. It did lose a few points for its business and regulatory climate: The World Bank ranks the Netherlands 28th, just behind Switzerland and France.

The problem? Badly hurt by the financial crisis, the Dutch have capped bankers’ bonuses at just 20 percent of their annual salaries — a far more drastic curb than was imposed by the European Union. Several bankers told me that unless the Dutch repealed the cap, they wouldn’t consider moving to Amsterdam. “I’d love to relocate to Amsterdam,” one top executive told me. “But I don’t think we’re wanted there.”

And London’s ranking?

Out of curiosity, I examined the same criteria and scored London itself. The result?

London earns a near-perfect 58 points. The only black mark was its quality of life, primarily because of its high cost. Mercer ranks London just 39th (New York ranks 44th).

“London has so many advantages,” Yeandle said. “I think that will remain true even if it’s outside the EU. But if the vote costs London its pre-eminence, that will be a self-inflicted tragedy.”

- (© 2016 New York Times News Service)