Working paper series / Johann-Wolfgang-Goethe-Universität Frankfurt am Main, Fachbereich Wirtschaftswissenschaften: Finance & Accounting 177
This paper traces the location of foreign banks in Germany from 1949 to 2006. As suggested by new economic geography models we find a ?u?-shaped concentration of foreign banks in Germany. Only after a competition between several cities, Frankfurt has emerged as the pre-eminent financial centre, triggered by the ?historical event? of setting up the German central bank in Frankfurt. After a strong increase, Frankfurt?s share in the location of foreign banks in Germany decreases slowly but significantly since the mid 1980?s. We conclude that there will be a lesser role in Europe for secondtier financial centres in the future.