Regardless of Brexit blows, London nonetheless dominates the European monetary world


(Bloomberg) – Paris and Frankfurt have a lot of work to do if they are to seriously challenge the City of London.

This is the result of an analysis by the London think tank New Financial, which found five times more international financial activity in Great Britain than in France or Germany.

While the report relies on data from 2019 – before Brexit went into effect and before London lost its crown as Europe’s top place for buying and selling stocks – it underscores the city’s dominant role in Europe as a hub for derivatives and foreign exchange trading, asset management, venture capital and banking.

“This report shows that you would have to move a tremendous amount of activity out of the UK before France, Germany or any other EU financial center significantly closes that void,” New Financial chief executive William Wright said in an email. Wright said that even if 10% of all international operations were relocated to the UK, the country would be “way ahead”.

According to the report, the UK is the second largest financial center in the world after the US. China was in third place, France and Germany in sixth and seventh place, respectively.

However, Britain’s leadership will be diminished by Brexit. Financial firms were largely unable to use their London bases for business within the block, forcing banks like JPMorgan Chase & Co. and Goldman Sachs Group Inc. to move hundreds of billions of dollars in assets and thousands of employees to the continent .

Financial services were left out in the Brexit trade deal, while a separate agreement on cooperation between EU and UK financial regulators has also encountered problems as broader relations threaten to weaken. The bloc has signaled that it is in no hurry to issue so-called equivalence decisions that would allow European business to be done from London.

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