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The planned move of the European Banking Authority’s headquarters from London to Paris will reduce the UK’s influence over the rules governing European finance, experts said on Tuesday.

EU foreign ministers meeting in Brussels on Monday voted for the EBA to shift its headquarters from London to Paris after Brexit.

The EBA is responsible for writing standards that EU banks should abide by — how to calculate potential losses on risky loans, for example — as well as carrying out stress tests on them to safeguard the financial system.

The organisation has been based in London since its creation in 2011, but with just 185 staff occupying a few floors of Canary Wharf’s Canada Square, the EBA’s move to Paris is no great loss to the UK from a jobs or real estate perspective.

Experts, however, said there would be other consequences. “It will diminish [UK] soft power and give us less influence over the rules and regulations [the EBA] set,” said Jon Holt, head of financial services at the UK business of KPMG, the accounting firm.

He added, however, that he did not see the EBA’s move undermining London’s role as a leading centre for financial services in the short term. “London’s status as a world city, its language, law, capital markets and role in dollar clearing all provide an unrivalled draw,” he said.

Tom Huertas, partner at consulting firm EY and a former chair of the EBA, said the organisation’s move to Paris highlighted the new reality that the UK will face after it leaves the EU in March 2019.

“The EBA move out of the UK makes clear that in the future the UK will no longer have a seat at the table when the EU determines the rules that govern EU finance,” he added.

Others highlighted how the EBA’s role had been diminished by the creation of a eurozone banking regulator under the umbrella of the Frankfurt-based European Central Bank in 2014.

Dirk Schoenmaker, a senior fellow at Bruegel, a think-tank, said the EBA was the “least important” of the three pan-EU financial watchdogs — the others being the Paris-based European Securities and Markets Authority and the Frankfurt-based European Insurance and Occupational Pensions Authority.

“The EBA will wither away as the ECB becomes more powerful,” he added.

Bankers were divided on the significance of the EBA’s move. One said that Paris could certainly use the EBA’s switch to the French capital as part of its efforts to lure banks there after Brexit.

Paris and Frankfurt have been aggressively fighting for the businesses that banks are moving out of London because of Brexit.

Frankfurt so far has the upper hand, with Goldman Sachs, Morgan Stanley and Citigroup all planning to locate their main EU broker-dealers in the German city.

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