(Bloomberg) — A French financial services association is urging lawmakers to further rein in the cost of firing some senior staff, after a cap on severance pay was introduced only last year. 

The maximum monthly salary that banks are required to use when calculating the severance package for so-called material risk takers, which typically include senior traders, should be cut substantially, Paris Europlace Chief Executive Officer Jean-Charles Simon said in an interview. He suggested that it should be reduced by half. 

France last year introduced the ceiling as part of a sweeping bill aimed at propping up the country’s appeal for the financial services industry. The cap was linked to the maximum portion of annual pay used to set someone’s social security contributions, a figure known by its French acronym PASS, which is currently €47,100 ($54,627).

Long-term employees can be entitled to severance pay equal to as much as 20 months of gross pay. 

“The idea is to make the Paris financial scene more attractive by revising this amount,” Simon said. The cap “could, for example, be halved, so as not to stray too far from compensation amounts paid in the United Kingdom.”

The government under President Emmanuel Macron has been keen to attract Wall Street-style jobs and cement the status of Paris as a major financial center in Europe. The city benefited when Brexit forced many of the world’s biggest banks to find new hubs for their operations inside the European Union. 

The French government is now considering adopting a new attractiveness law, Simon said. Formal discussions could kick off in the coming months, he said. 

A representative for the French economy ministry declined to comment.

Europlace is also urging the government to expand the group of employees that are exempt from France’s restrictions on working overtime to include material risk takers. 

The move would “reassure” banks about potential litigation as several faced “cold showers” in court over the past years when they ended up having to pay “considerable compensation related to employees’ overtime claims,” Simon said. 

Under European banking rules, MRTs are staff whose actions can have a material impact on the risks taken by a financial services firm. That typically includes more senior traders.

Another change proposed by Europlace is to broaden the mandate of France’s financial regulators ACPR and AMF to include a focus on competitiveness, Simon said. In the UK, Chancellor of the Exchequer Rachel Reeves has been seeking to roll back red tape and pushed regulators to prioritize growth.

The requests from Europlace come amid questions from Wall Street banks regarding the country’s political and fiscal stability. Higher corporate taxes that were voted in February to diminish France’s public deficit and a new dividend tax law have added to an impression among some that the attractiveness of Paris may have peaked.

The proposed changes “would send an important signal at a time when certain foreign players may have doubts about France’s fiscal stability, and would help to attract even more people to Paris,” Simon said. 

–With assistance from Sam Nagarajan and Nicholas Comfort.

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