London will give up its position as "world financial capital," I would think. That always seemed a bit odd, and now that they're losing one of their main advantages...
From the article: "London is a great finance center in a way that New York is not." It became a great finance center in part because the UK was in the EU and also had strong connections to the USA. That is broken now, so it is all downhill, a lot of that business (not all of it, but a significant amount) will leave town.
The French have been claiming the end of the City of London and Anglo-Saxon capitalism since the 16th century. Other than the outbreak of WWI, I can't think of a single example that had a material, long lasting effect on London as a center for global finance.
Yes, London is at an inflection point. Then again, so is the EU, traditional commercial banking and global finance in general. Brexit pales in comparison to these things.
Having worked in the City since the 90s, I've seen the Euro conversion come and go, which would end the City, then more EU attempts to centralise finance in Frankfurt, would end the City, and also Japan/HK/Singapore/Beijing, would end the City.
Frankfurt is another hour away from New York, and English isn't the first language. The vast array people with financial skills are in London.
I won't argue that this isn't significant, but it's assets, not people.
And let's not forget Gordon Brown's "light touch regulation" led to lower costs for financial companies operating out of London, due to less regulation and bureaucracy than the EU.
It also helped fuel the credit crunch as well. So there's v2 of that to look forward to if the next UK government decides to relax oversight to attract businesses.
UK GDP growth is almost entirely due to financial services and legal sectors in London, who just received the official notification that London is no longer the banking center of Europe.
I'm ok with London as a financial center being destroyed if it means the rest of the UK gets more resources & investment, and thus wealth spreads more equally.
It's always been wild to me the difference between London & the rest of the UK.
Marginal Revolution had an interesting discussion on the possibility of Finance leaving London [0].
Reading the discussion it seems like there's no real obvious choice for a European city which might end up owning Finance in the way London has. After all London earned its status as financial capital a long time before the EU was created and has a long history supporting this industry. The legal system and services that formed around it are unlikely to be able to be easily transplanted, so despite other cities wanting to offer themselves as substitutes it's not Banks could move without losing some economies of scale.
This is of course assuming that our government attempts to negotiate for us to stay in the 'single market' and that the finance industry itself lobbies for Europe to play ball and keep business as usual.
Of course, it is possible that we could see some decentralisation, which could weaken Europe's banking industry in relation to the US.
Isn’t this probably good news for everyone that doesn’t work in finance? London has become essentially unaffordable for regular Britons, partially because of finance salaries driving up living costs (similar situation to SF, from what I understand.)
London used to be the banking capital of the entire EU. Everyone is now considering other EU capital cities. We'll be seeing huge effects for years, if not decades, to come.
The City of London couldn't have changed that much since the last time I was there, about 5 years ago. It's where all the banks and that are, right? Seemed very much a no-go in the same way to me.
Yes, I agree it’s significant and major (for the UK), but I don’t think it’s major enough to dethrone London from being one of the world’s financial centers and have it replaced by Frankfurt for example.
That's not really what I'm referring to. I understand that you are referencing the status of London as one of the main financial capitals of the world but I'm looking for more about the allusions towards some sort of special tax situation perhaps. Or maybe I'm misreading the allusions.
The City has one of, if not the world's greatest concentration of finance brainpower and capital, and has survived through hundreds of years of global turmoil as one of the world's leading financial centres. Do you really think these vested interests will just give up that lead and move elsewhere?
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