After Brexit, the city was shaken but still prevalent in Europe

London’s business district, May 8, 2021 (JUSTIN TALLIS / AFP / Archives)

A year after Brexit went into effect, the city has seen itself outperform its continental rivals in stockbroking, but it hasn’t experienced the dreaded exodus of bankers and remains Europe’s leading financial center.

“London has been a global financial center for hundreds of years,” emphasized Lee Wilde, an analyst at Interactive Investor, and the chances of Paris, Amsterdam or Frankfurt “grabbing the crown of the UK’s first European financial center are slim.” Interview with AFP.

However, the city’s financial services have seen Brexit hard: they are not covered by the UK-EU trade agreement and do not benefit from the equivalents that the union gives to other countries.

Stock trading suffered from the first few weeks, as overnight British traders were denied the right to offer EU-listed stocks to European clients.

Its value fell by nearly 40% in London in January 2021 in favor of Amsterdam, with the British center now relegated to number two in Europe, according to figures from Cboe Global Markets cited by AFP.

At the London Chamber of Commerce on March 15, 2019
At a Chamber of Commerce in London, March 15, 2019 (Isabel INFANTES / AFP / Archives)

But the city is a globally dominant financial center in many other markets such as foreign exchange and derivatives, which “rules out any idea that Paris or Frankfurt is about to replace London,” according to a study published in June by the British think tank. The new finance.

London remains the world’s second-largest financial center after New York, far ahead of its European competitors, according to the 2021 Global Financial Centers Index – a benchmark ranking for London and Shenzhen-based research complexes.


The city “provides an ecosystem for banks, advisors, lawyers, fund managers and hedge funds that constitute a massive reservoir of liquidity,” AJ Bell analyst Ross Mold told AFP.

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According to EY, about 44% of financial services firms have moved or plan to move operations or staff from the UK to the EU so they can work there, and the total reported asset transfers at the end of 2021 amounted to £1.3 billion.

The towers of several major banks, such as Citi, HSBC and Barclays, in the business district of Canary Wharf, London on December 11, 2020.
The towers of several major banks, such as Citi, HSBC and Barclays, in London’s Canary Wharf business district on December 11, 2020 (Tolga Akmen / AFP / Archives)

Dublin and Luxembourg welcome the most office moves, but Paris the most. President Emmanuel Macron in June opened the new Parisian building of the US bank JPMorgan, in anticipation of the transfer of several hundred traders.

British banks also terminated some commercial relationships with clients located in Europe.

But the scale of employee movements has been adjusted downward and relates to only 7,400 jobs in total, according to EY. A drop in the sea, as the UK employs more than a million people in financial services, including about 400,000 in London.

According to employment consultancy Morgan McKinley, more than 30,000 jobs were created in Britain’s financial sector in 2021, which has continued to thrive despite Brexit.

Some estimates have indicated as many as 100,000 job transfers from the UK to the EU. “We haven’t seen a mass exit because of Brexit, and now it’s unlikely that will ever happen,” said Håkan Enver, managing director at Morgan McKinley.

‘slow deflation’

In the longer term, the city would instead risk a “slow deflation” and “displacement of activities towards other centres, most likely in the US or in Asia”, one of London’s major financial lobby groups, TheCityUK, abounds.

At the entrance to the London Stock Exchange, December 29, 2020
At the entrance to the London Stock Exchange, December 29, 2020 (Tolga Akmen / AFP / Archives)

The 122 IPOs that raised £16.8 billion in 2021 – a record since 2007 – are another sign that London’s position remains attractive, even if it benefits from global momentum.

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British clearinghouses, so far unparalleled on the continent, are for their part benefiting from a temporary mandate from the European Union.

But this is an exception: “The EU has made it clear that the equations will not be given any time soon to the UK,” city politician Catherine McGuinness said in a statement to AFP, calling on British financiers to look beyond Europe.

She emphasized that the UK “must continue to work to make the financial services sector more competitive internationally”, even if “regular dialogue with the EU is essential”,

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