Germany could make it easier to hire and fire senior bankers in what would be a rare exception to its strict labour rules, an ally of Chancellor Angela Merkel said.

The proposed move comes as Frankfurt seeks to attract finance groups from London after Brexit. 

The move would apply to those earning more than around €250,000.

It is intended as a sweetener for global banks who want to move staff to the continent after Brexit but are worried about laws making it hard to sack them. 

"We do not need the German protection against redundancy for top earners in banking," Volker Bouffier, vice chairman of Merkel's Christian Democratic Union (CDU) told Reuters in an interview. 

"I see a political prospect of changing this law by the middle of next year or in the Autumn (of 2018), once the new government is in place," he added. 

Germany is holding national elections in September, with Merkel's conservative bloc expected to emerge as the strongest party group.

The pledge comes as the competition between rival centres, including Dublin, Paris and Frankfurt, gathers pace, with global banks expected to chose one of these cities as a base for doing business within the EU in the coming weeks. 

Lobbyists promoting Paris as a financial centre have also sought to loosen rules governing dismissals but the idea was rejected by the country's previous government. 

France's new president, Emmanuel Macron, may be open to making such a change. 

However, Macron's En Marche party is new and may be forced to govern in a coalition, making the country's political future uncertain. 

Bouffier said he expected the majority of big global US banks to chose Frankfurt as their primary location within the EU.

"The British government has been telling everyone in London that everything will stay as it is, including with passporting to Europe," he said.

"That is complete nonsense. I don't think it will work out for Britain," he added.

Banks that now use London as a springboard for selling services across the European Union fear they will lose access to that market when Britain leaves the bloc, prompting them to seek a foothold elsewhere. 

Bouffier said he had Merkel's backing in winning banks for Frankfurt. Many German politicians have been reluctant to speak out in favour of the industry, with memories of the financial crash it caused still vivid. 

"Germany offers stability," he said. "I expect concrete decisions from banks in summer. They are not going to wait for the outcome of (Brexit) negotiations." 

Although senior managers at German companies are currently exempted from full legal protection against sacking, extending this to bankers would be contentious.

Bouffier said it could be done based on the legal definition of the banker's role. 

A spokesman for Verdi, one of the biggest trade unions in German financial services, said it would not support such a change.

A growing list of financial services firms have already confirmed relocation plans, with HSBC moving 1,000 staff to France, AIG set to shift a string of executives to Luxembourg and Lloyd's of London opting for a subsidiary in Brussels.

Meanwhile, US banking giant JP Morgan has bought a yet to be completed office block in Dublin city centre as part of its expected plans to create up to 500 new jobs in the city.

And Standard Life is likely to choose Dublin as the base for its European Union subsidiary after Britain leaves the bloc, its chairman said this week.