Will London Survive Brexit?
Brexit has set a hungry cat among the financial pigeons of the City of London. No one yet knows what kind of access to the EU’s single financial market UK-based firms will have, and European centers have spotted an opportunity to claw some of this business back.
LONDON – Brexit has set a hungry cat among the financial pigeons of the City of London. No one yet knows what kind of access to the European Union’s single financial market UK-based firms will have, and Prime Minister Theresa May’s call for a general election to be held on June 8 has further clouded the picture, at least in the short term. But there is a nagging assumption that things cannot remain the same, and that there will be a price to be paid for leaving the EU.
So UK-based financial services firms, especially those that have chosen London as their European headquarters precisely in order to secure access to the whole EU market from one location, are reviewing their options. Indeed, regulators are obliging them to do so, by asking how they will maintain continuity of service to their clients in the event of a “hard” Brexit. (May’s government prefers to talk of a “clean” Brexit, but that is semantics).
Rival European centers have spotted an opportunity to claw some of this business back to the continent (or to Ireland). Other governments have long resented London’s dominance. It was galling to have to acknowledge that the principal center for trading in euro-denominated instruments lay outside the eurozone.
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