Article 50 may have been invoked and the long path towards Britain’s exit of the European Union may be under way, but London is still top of the pile when it comes to global financial centres – at least for now.
The Global Financial Services Index has ranked London once again in the top position, according to a report from the Y/Zen Group. It has a narrow advantage over New York and the China Development Institute in Shenzhen. However, its Asian rival, along with other Asian centres, like Hong Kong and Singapore, appear to be picking up the pace fast.
A Financial Times report suggests that London and New York have both lost ground to the chasing pack, thanks largely to Brexit and the arrival of President Donald Trump.
The survey is carried out twice a year and involves an online survey conducted by financial service professionals around the world. The data incorporates the period to the end of December with London’s rating reportedly influenced in part by the uncertainty over what will happen following the UK’s EU departure.
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“Will banks have to move lots of staff to keep doing business in the EU?” asked author of the report Mark Yeandle, associate director of Z/Yen. “And where will they go — to Paris, Frankfurt, Luxembourg or to Dublin?”
The bulk of respondents reportedly feel that London will stay as the dominant financial centre in Europe, but there is a belief that some insurers and banks may move their activities abroad. Already the likes of UBS and HSBC have indicated plans to move some activities into the centre of Europe, while Goldman Sachs has outlined plans to increase its own bases in both Frankfurt and Paris. In addition, Lloyd’s of London appears headed to a Luxembourg base – while the country has also lured M&G, the fund management subsidiary of Prudential, as well as AIG.
Speaking to the publication, Miles Celic, chief executive of TheCityUK, outlined that the real risk of Brexit is not so much that companies may leave Britain – but that they may head out of Europe altogether.
“The real risk [of Brexit] is that activity leaves Europe altogether going to New York or Asian markets such as Singapore or Hong Kong,” he said.
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