The Mayor of London has helped the city recover from Brexit and the pandemic to maintain its place as a top hub for financial talent.
As the new year began, Sadiq Khan highlighted fintech as one of the areas where the city will continue to shine, as well as capitalizing on the boom in ESG investing across Europe.
“Despite the challenges, London will continue to be a leading global financial center,” Khan told Financial News. “While Brexit has created some uncertainty and the pandemic has significantly impacted our operations, high-profile talent is still choosing London. Our ecosystem provides access to growth capital, policymakers, infrastructure, world-class universities and talent in one city, and our cultural appeal is stronger than ever.”
London’s position as a leading financial services destination came under unprecedented pressure in 2021. The city raised concerns about the lack of an “equivalence regime” that would have allowed financial services firms in London to continue selling into the bloc.
As traders sought workarounds, European regulators took an increasingly tough stance on those trying to circumvent entry rules using techniques such as “escorts” and reverse solicitation.
At the turn of the year, Amsterdam overtook London’s pole position for stock trading in Europe, surpassing the €8.6 billion in shares traded daily in the city by quadrupling its own volume to €9.2 billion. While London would take that spot in June, fears also grew that New York would win more business as it led the way in new vehicles such as Spacs.
READ Bankers expect New York to take the crown of London’s financial hub as Brexit impacts take hold
However, commentators hailed the government and regulators for a series of landmark reviews that have sought to boost the UK’s competitiveness in capital markets, including the Kalifa review of UK fintech and Lord Hill’s proposed overhaul of the city’s listing system.
“London will continue to lead in fintech,” Khan said. “London’s position as a global financial hub, combined with its status as a global technology hub, has cemented the UK as a leader in fintech. It has the ‘Fin’ of New York, the ‘Tech’ of the West Coast and the policy makers of Washington, all within a 15 minute public transit ride.
Since 2015, the number of fintech startups and scale-ups headquartered in London has grown by 64%, he said. “I assume that number will continue to rise.”
READEx-LSE boss Xavier Rolet says the listing restructuring will attract top firms to London
Sentiment in the City was also boosted later in the year when the European Commission announced it would seek an extension of the post-Brexit clearing deal for derivatives trading, a crucial around €90 trillion market that London is always keen to see still dominates.
As the UK hosted the influential COP26 climate conference in 2021 and ESG funds saw record inflows, with European products trending around €112.4bn in the second quarter alone.
“London will capitalize on new opportunities in green finance. According to the Global Green Finance Index, London is already the global center for green finance and the London Stock Exchange is the greenest in the world.
“COP26 was a milestone for green finance and I will continue to raise London’s profile on the global stage as the world’s top destination for green tech companies and business innovators to build on that momentum.”
To contact the author of this story with feedback or updates, email Justin Cash