How competitive will London be post-Brexit?
5 Jul 16
Is London’s spot as the number one financial hub threatened and which financial centres will benefit the most from the United Kingdom’s decision to leave the European Union?
PA gathered views from the Mayor of London and three industry figures.
“I think London will remain the financial capital of Europe, it will retain pre-eminence although it will be weakened by leaving the European Union. The critical mass working in finance in London is so much bigger than other financial centres in Europe. London’s size, support systems, deep pool of lawyers, the legal system (contracts written in English law is a strong benefit), expertise, skills and high proportion of FX will secure its number one position.
That being said however, there is potential for Eastern financial centres to grow, such as Hong Kong, as well as other European cities. Dublin will benefit disproportionately, gaining from being an English-speaking city and many firms already having operations there. The population is smaller than Frankfurt or Paris however. Frankfurt has a more friendly business climate than Paris.
The financial sectors in London that will lose out are major banks, which will move their financial market operations to onshore Europe; fixed income trading and European equity trading. FX will not be hit however, as London will still be the preeminent foreign exchange venue, although its senior management would no longer be on ground in London. Moreover, the City of London will be less attractive for international talent, as the point base system may deter and disincentive them, and they may feel less comfortable working here.”
