BERLIN, May 11 (Xinhua) -- German state of Hesse, which houses financial center Frankfurt, on Friday urged the federal government in Berlin to play a more active role in shaping European Union (EU) banking regulations after Brexit.

"EU regulatory policies cannot lead to a neglect of German interests," Hesse's regional finance minister Thomas Schaefer wrote in letter to German finance minister Olaf Scholz.

Schaefer hereby criticized in particular that Germany was less assertive than France with regards to promoting the competitiveness of the two Eurozone member's respective financial sectors.

According to the Schaefer, uniform EU-wide regulatory and supervisory mechanisms which served the narrow interest of France were part of a strategy to "establish Paris as the leading financial center in the EU after Brexit."

He highlighted the engagement on behalf of French president Emmanuel Macron to strip the United Kingdom of the right to host Euro-clearing activities, as well as expanding the European Securities and Markets Authority (ESMA) in Paris in this context.

"In comparison, the federal (German) government is much more hesitant to adopt measures to improve the competitiveness of Germany as a financial hub", Schaefer complained in the letter.

Frankfurt and Paris are both widely seen as the two main competitors to host new European headquarters created by banks in London after the United Kingdom leaves the EU. The British financial services lobby group "TheCityUK" estimates that 70,000 jobs could be lost in the industry if Britain does not remain in the single market after Brexit.

So far, the two cities are running neck-and-neck in vying for financial services business from London. The lobby group "Frankfurt Main Finance" reported that as many as 20 banking institutions were currently set on expanding or creating new corporate entities in the city.

Frankfurt is already home to three major regulatory bodies, the European Central Bank, German Central Bank (Bundesbank) and German Federal Financial Supervisory Authority (BaFin), potentially giving it an edge over continental rivals.

However, Paris' post-Brexit prospects were recently enhanced by a decision to re-locate the European Banking Authority (EBA) there from London alongside the ESMA headquarters which are already in the French capital.