(BFM Bourse) – It’s been a year since the United Kingdom left the European Union. Since then, the City has seen itself overtaken by its continental rivals in stock brokerage volumes, but has not experienced a massive exodus of bankers and thus retains its rank as the leading financial center on the Old Continent.
London has established itself as one of the world’s leading financial centers for several centuries, and the chances that Paris, Amsterdam or Frankfurt will steal the crown of Europe’s leading financial center from the United Kingdom appear “slim”, notes Lee Wild, analyst at Interactive Investor, interviewed by AFP.
The City’s financial services have however experienced a rather severe Brexit: they are not covered by the trade agreement between the United Kingdom and the EU and do not benefit from equivalences granted by the Union to other countries. third. Trading in shares suffered from the first weeks after the divorce from the Union, with British operators being deprived overnight of the right to offer shares to European clients.
The amount of equity trading thus fell by around 40% in London in January 2021, to the benefit of Amsterdam, the British market now being relegated in this aspect to second place in Europe, according to figures from Cboe Global Markets transmitted at AFP.
An exceptional financial ecosystem
But the City is a globally dominant financial center in many other markets such as foreign exchange or derivatives, which “displaces any idea that Paris or Frankfurt are about to take the place of London”, according to a study published in June by the British think tank New Financial.
London is still well ahead of its European rivals, according to the Global Financial Centers Index 2021, a benchmark ranking of two think tanks based in London and Shenzhen. At the global level, the undisputed world capital of finance obviously remains New York.
The City “offers an ecosystem of banks, advisers, lawyers, money managers and hedge funds that serve a vast pool of liquidity,” says AJ Bell analyst Russ Mould.
According to EY, some 44% of financial services companies have yet moved or plan to move operations or staff from the United Kingdom to the European Union, and announced asset transfers totaled 1.3 billion euros at the end of 2021. books.
7,400 jobs displaced out of 400,000
Dublin and Luxembourg see the highest number of office moves, but Paris receives the most staff. President Emmanuel Macron inaugurated the new Paris premises of the American bank JPMorgan in June, in anticipation of the transfer of several hundred traders.
British banks have also terminated certain commercial relations with customers located in Europe.
But the scale of staff movements has been revised downwards and only concerns a total of 7,400 jobs, according to EY. A drop of water, the United Kingdom employs more than a million people in financial services, including some 400,000 in London. And according to recruitment consultancy Morgan McKinley, more than 30,000 jobs were created in the UK financial sector in 2021, demonstrating its ability to thrive despite Brexit.
Some estimates suggested up to 100,000 job transfers from the UK to the EU. “We haven’t seen an exodus due to Brexit, and it’s now unlikely that will ever happen,” said Hakan Enver, chief executive of Morgan McKinley.
A risk of “slow deflation”
Ultimately, the City is more likely to “slow deflation” and “a shift of activities to other centers, most likely to the United States or Asia”, abounds one of London’s main financial lobbies, TheCityUK.
The 122 IPOs which raised 16.8 billion pounds in 2021 – a record since 2007 – are another sign that the London market remains attractive, even if in this respect the momentum is shared at the global level.
The British clearing houses, for the moment without rivals on the continent, benefit for their part from a provisional authorization from the Union. But this is an exception: “The EU has made it clear that equivalences will not be granted in the United Kingdom anytime soon,” said Catherine McGuinness, the City’s political chief, in a statement to AFP, calling on finance British to look beyond Europe.
The United Kingdom “must continue to work to make the financial services sector even more competitive internationally”, she said, even if it is “essential to have a regular dialogue with the EU”.
(With AFP)
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