More than £1tn leaves London for EU after Brexit - survey
By Sean Farrell
Date: Friday 16 Apr 2021
(Sharecast News) - Banks, insurers and asset managers have moved or are moving more than £1tn of assets to the EU in response to Brexit with more to come, according to report.
Banks have shifted or are in the process of shifting more than £900bn, about a tenth of the UK banking system, to EU centres and insurers and asset managers have moved more than £100bn, the New Financial thinktank said.
More than 440 financial firms in the UK have moved part of their business, staff or legal entities to the EU, more than previously estimated, the report found. New Financial said its figures were probably too low because many moves would have escaped its search.
"While this is the most comprehensive analysis yet of the impact of Brexit on the City, we think it is an underestimate," the report, "Brexit & The City: The Impact So Far", said. "We are only at the end of the beginning of Brexit."
Because of limited equivalence arrangements between the UK and EU there is likely to be a drip-feed of further business from Britain to European financial centres and the figures will increase as the EU takes a tougher line on the location of businesses and people, New Financial said.
New Financial has identified about 7,400 staff moves or local hires in response to Brexit but this figure is from a small minority of firms and the number will increase over the next few years. The bigger issue is new jobs in the EU being created in future that might otherwise have been created in the UK, it said.
Dublin is the clear winner in attracting business from the UK. New Financial said 135 firms have chosen the city as a post-Brexit location, ahead of Paris with 102, Luxembourg with 93, Frankfurt with 62 and 48 moves to Amsterdam.
"In the longer term, we expect Frankfurt to be the 'winner' in terms of assets, and Paris in terms of jobs," New Financial said.
London will remain the dominant financial centre in Europe for the foreseeable future and even the biggest relocations so far only represent a maximum of 10% of an individual firm's headcount, the report said. Over time other European cities will chip away at London's lead and the UK's influence in the financial industry, it added.
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