Brexit and The City of London

The inability of EU capital markets to compete with London has long been a source of frustration for continental European politicians. That London remains the primary source of capital in this time zone and that, through its use of soft power across the world, the UK (and London’s) position at its centre of approximately 40% of Global activity has not changed since 24 December 2020. That, at present, London can’t trade some EU generated “products” will, one suspects, be treated as a win within the narrow confines of the EU and a loss for those whose bonuses used to depend on them.

And the EU’s wish to have a capital generation centre wholly within its political control will not diminish but, as time moves on, the amendments to regulation and practice will, by definition, move towards cost effectiveness more quickly in the UK environment than it can ever do in the rules based, develop when told climate that is the basis of the legal systems in France and Germany. Spookily my dissertation from 30 years ago gave me an interesting view of this part of the world. I will consider publication if enough people want to know what an undergraduate thought of the Accounting Profession within the EU in 2001.  

One suspects the generation of false trade barriers will continue to be heralded in Brussels as a means of protecting its single market, but at the same time will be a more surreptitious move towards improving their economies by utilising lessons learned in London. The recent discovery of 1,000 businesses setting up in the UK a result of Brexit and the failure of the EU to recognise our standards shows this process is moving on at a pace.    

But the EU will endure a lag and the location, which is the cheapest, most effect and full of the expertise necessary to deal with the global markets various nuances will always win out. The political desires of Berlin and Paris can only, in the end, harm the populations of the EU. You either get with the programme, accept your limitations, and move on or you don’t. No matter how much you want the answer to be different, the market will out and, whereas the bonus’ of present occupants might be being damaged, I have every confidence that ongoing incumbents will find ways of generating value and making money.

Article written by: Jeremy Frost, Director

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