By Jonathan Gould and John O'Donnell
FRANKFURT (Reuters) - A German politician said on Thursday he was trying to persuade foreign banks to make Frankfurt their home after Britain's vote to leave the European Union, and outlined how Europe's biggest economy wants to bolster its financial capital at London's expense.
Thomas Schaefer, finance minister of the state of Hesse which includes Frankfurt, said he had spoken to London banks with an arm in Frankfurt as well as others, and sought to persuade potential movers that local labour law and tax were not overly onerous.
"We are listening very carefully to the questions that the financial sector has after the Brexit vote," Schaefer, a member of Chancellor Angela Merkel's Christian Democratic Union party, told reporters.
"We are campaigning for Hesse because the financial centre of Frankfurt has a lot to offer," he said at a meeting, where numerous Union Jack flags were put on display.
Most German politicians have so far been reluctant to publicly push Frankfurt as an alternative to London. Many Germans remain hostile to banks after the financial crash.
Schaefer's remarks suggest momentum may now be growing behind Frankfurt, less than two months after Britain voted in a referendum to leave the European Union -- a process referred to as Brexit.
Schaefer did not, however, offer any prospect of special deals to cut tax or any other concessions. He said the city's infrastructure and the fact that it hosted the European Central Bank were reason enough to move there.
Schaefer said he had held talks with "all kinds of players" but that many had wanted to keep the contact secret. "There is a fear of being considered disloyal in the London community," he said.
The comments come as Germany's banks, worried that Frankfurt could get left behind as rival cities such as Dublin or Amsterdam compete for London's business, urged the country's politicians to step up their efforts.
The head of Germany's BDB banking association had criticised politicians earlier on Thursday for being slow to act. "My impression is that France is being more active in support of Paris," Michael Kemmer told journalists.
Kemmer also urged Germany to abandon plans to introduce a tax on financial transactions, a levy backed by the country's finance minister Wolfgang Schaeuble.
Schaeuble's support for such a measure is, however, largely symbolic and there is little prospect of banks that move to Frankfurt facing such a trading levy. Years of talks to introduce the charge in Europe have yielded nothing.
Many banks or fund managers based in London are there in part because it allows them to sell their products within the wider European Union of 28 countries.
That would most likely change if Britain were to leave the bloc. A bank based in Germany or France, however, would still have its 'passport' to sell across the EU.
Frank Niehage, head of FinTech Group, a financial technology specialist, recently said there had been a rise in enquiries from London banks.
"We know ... that they are looking here for alternative office space for their employees out of London," he said.