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Has brexit ruined the city of london

Yeah Brexit has materialised over two years ago and now we have data to look at to measure the actual impact rather than Daily Mail journalists predicting the effect to be "non-material". Whether Brexit was a lie or not is another topic (it was anyway simply because the wealthy and powerful in the UK wanted to avoid EU rules on concealing their monies - yes, really) but it is now clear it is a serious hit to London as a financial centre.

To quote ex BoE governor Mark Carney, UK economy size was 90% that of Germany's before Brexit - it is now less than 70%. Perhaps someone to listen to and believe the words of, you do the math: a smaller economy = less business for banks, meaning less fees and therefore less bonuses to be earned. A net loss.

That being said I doubt that London will ever lose its status, not at least its' importance in FX markets seeing its geographical advantage (literally in the middle between US and Asia, spanning both timezones a little bit, no wonder the most liquid times are the overlap between US and EU hours) and the infrastructure it has amassed over the past centuries.

Maybe one day, after all Amsterdam used to be the center of finance at some point during history and is not anymore. Who knows? Moreover, if derivatives clearing will at last move to Europe (which it will) then that's another blow to the status of London as a financial center. Not to mention another important issue which is the lost "passporting" rights (selling financial services without regulatory cost to mainland Europe).

It's quite a shame for Brexit to have happened, the UK population is generally xenophobic so it was an easy sell and of course the exploitation of the NHS for Europeans was not great either. The average citizen was nowhere close to appreciating or understanding the whole issue, surely these political campaigns all have their own agendas and focused only on some elements of this decision rather than providing the big picture. For such a consequential decision a simple majority condition is quite "dumb" and should had been at least 60% for or against for it to happen or not.

David Cameron wanted to gain some political advantage by this vote, unfortunately it failed (he is now a university teacher in Abu Dhabi which says it all). All the trade deals with 3rd-world countries and 9000 kilometers away is laughable to recktify the situation. EU economy is huge and is a neighbor to the UK. It was almost a no-deal Brexit.

Do you think GB will ever re-join the union?
 
It is an interesting question and the current trend in the polls seems pretty clear https://en.wikipedia.org/wiki/Opini...m_rejoining_the_European_Union_(2020–present) - eventually, there needs to be some sort of collaboration. After all, the EU is the UK's closest and biggest neighbour, so the closer the collaboration, the better. The bigger question is when this will happen. Should the Conservatives be wiped out at the next election, there might be an opportunity to rejoin earlier.

What do others think?
 
JustAnotherHuman said:
Yeah Brexit has materialised over two years ago and now we have data to look at to measure the actual impact rather than Daily Mail journalists predicting the effect to be "non-material". Whether Brexit was a lie or not is another topic (it was anyway simply because the wealthy and powerful in the UK wanted to avoid EU rules on concealing their monies - yes, really) but it is now clear it is a serious hit to London as a financial centre.

To quote ex BoE governor Mark Carney, UK economy size was 90% that of Germany's before Brexit - it is now less than 70%. Perhaps someone to listen to and believe the words of, you do the math: a smaller economy = less business for banks, meaning less fees and therefore less bonuses to be earned. A net loss.

That being said I doubt that London will ever lose its status, not at least its' importance in FX markets seeing its geographical advantage (literally in the middle between US and Asia, spanning both timezones a little bit, no wonder the most liquid times are the overlap between US and EU hours) and the infrastructure it has amassed over the past centuries.

Maybe one day, after all Amsterdam used to be the center of finance at some point during history and is not anymore. Who knows? Moreover, if derivatives clearing will at last move to Europe (which it will) then that's another blow to the status of London as a financial center. Not to mention another important issue which is the lost "passporting" rights (selling financial services without regulatory cost to mainland Europe).

It's quite a shame for Brexit to have happened, the UK population is generally xenophobic so it was an easy sell and of course the exploitation of the NHS for Europeans was not great either. The average citizen was nowhere close to appreciating or understanding the whole issue, surely these political campaigns all have their own agendas and focused only on some elements of this decision rather than providing the big picture. For such a consequential decision a simple majority condition is quite "dumb" and should had been at least 60% for or against for it to happen or not.

David Cameron wanted to gain some political advantage by this vote, unfortunately it failed (he is now a university teacher in Abu Dhabi which says it all). All the trade deals with 3rd-world countries and 9000 kilometers away is laughable to recktify the situation. EU economy is huge and is a neighbor to the UK. It was almost a no-deal Brexit.

Do you think GB will ever re-join the union?
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Yeah you raise some good points. I’m hopeful that some sort of trade agreement akin to Canada’s can be reached. One can’t help but think that an isolated United Kingdom is bad for IB, it’s definitely made my consider switching to international posting from a Uk one after a couple years to compensate. That event said, Russia’s invasion of Ukraine has brought Europe closer together and I’d have little reticence suggesting tensions between the UK and EU aren’t what they were 2 years ago.
 
ARussell said:
Yeah you raise some good points. I’m hopeful that some sort of trade agreement akin to Canada’s can be reached. One can’t help but think that an isolated United Kingdom is bad for IB, it’s definitely made my consider switching to international posting from a Uk one after a couple years to compensate. That event said, Russia’s invasion of Ukraine has brought Europe closer together and I’d have little reticence suggesting tensions between the UK and EU aren’t what they were 2 years ago.
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It has been a long time since there was a large and successful IPO in London, so I am not overly positive for the future
 
ARussell said:
Fair.
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IPOs on the stock market is only one component of capital markets, FX is still going strong for London. At the end of the day, GB is still a major economy, despite Brexit. Although derivatives clearing is planned to be moved within the bloc, which is a recent development and means actually a lot of business to be lost in the future in favor of the EU. As I mentioned, things change over time, and just as Amsterdam was the centre of finance at one point during history, London might also stop being it sooner or later.

Also, correction: there IS currently a “canada-style” free trade agreement reached between UK and EU. The problem is that so called “passporting” rights were lost as part of this agreement, which kind of pushes the Brexit deal towards the “hard” side rather than the “soft” side. This effectively meant that financial services could no longer be sold to the EU, and that’s a rather big cut to business seeing the size of the EUs economy is almost as big as that of the US.
 
JustAnotherHuman said:
IPOs on the stock market is only one component of capital markets, FX is still going strong for London. At the end of the day, GB is still a major economy, despite Brexit. Although derivatives clearing is planned to be moved within the bloc, which is a recent development and means actually a lot of business to be lost in the future in favor of the EU. As I mentioned, things change over time, and just as Amsterdam was the centre of finance at one point during history, London might also stop being it sooner or later.

Also, correction: there IS currently a “canada-style” free trade agreement reached between UK and EU. The problem is that so called “passporting” rights were lost as part of this agreement, which kind of pushes the Brexit deal towards the “hard” side rather than the “soft” side. This effectively meant that financial services could no longer be sold to the EU, and that’s a rather big cut to business seeing the size of the EUs economy is almost as big as that of the US.
Click to expand...
Yeah my bad, meant Switzerland: we already have a CETA deal. Obviously, yeah, passporting of financial services no longer being the same is a problem but an agreement where we’d basically be in the EU without being in the EU, appeasing the UK’s inchoate sovereignty goal and still allowing for eu trade benefits, (ie Switzerland) would be prettyyyy gooood, I’m for it.
Re. Amsterdam, yeah maybe it could be more influential as a financial hub in the future but I personally don’t really feel Amsterdam matched London’s influence as a financial hub from the perspective of overall influence throughout history but definitely agree with you, there are for sure reasons to be optimistic….just concerned about those reasons to be trepid as well
 
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