(ATF) London has lost its title as the share-trading capital of Europe to Amsterdam after Brexit stripped UK financiers of some rights to operate in the EU.
Euronext Amsterdam and two other Dutch share markets traded an average 9.2 billion euros ($11.2 billion) in shares each day in January while London accounted for 8.6bn euros, according to the Financial Times. That took Amsterdam’s total to four times its figure in December before the UK officially departed the EU.
The development is a blow to the prestige of London’s financial centre, The City, which has long been the hub for trade in Europe and second only in value of transactions to New York. The financial services sector is a crucial part of the UK economy, providing 1.1 million jobs nationwide, accounting for 7% of all economic output and generating £76 billion in tax receipts.
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But from January 1, the sector lost access to the EU’s single market and its European “passport”, a means for UK financial products and services to be sold in the 27-member bloc.
A so-called equivalence scheme is being negotiated to replace the passport programme, which was lost in the hasty separation negotiations, from which a deal emerged just a week before the UK’s departure.
Bank of England governor Andrew Bailey pressed the EU to agree a post-Brexit financial services deal by next month for the sake of pandemic recovery on both sides of the Channel.
Rebutting some of the demands made by Brussels in return for the City to regain access to EU states, Bailey said Britain had no intention of creating “a low-regulation, high-risk, anything-goes financial centre and system”.
“We have an opportunity to move forward and rebuild our economies, post-Covid, supported by our financial systems. Now is not the time to have a regional argument,” the UK central banker said in a speech.
However, UK officials have played down fears of an accompanying exodus of jobs from London.
Bailey last month said up to 7,000 jobs have so far been relocated to rival centres in the EU including Amsterdam – well down on doomsday predictions of as many as 50,000 losses.
But in Wednesday’s speech and a later interview to the Daily Telegraph, the central bank chief said Brussels was being unreasonable in its negotiating demands, in an apparent bid to grab business from London.
“Is the EU going to cut the UK off from itself? There are signs of the intention to do so at the moment, but I think that would be a mistake,” he told the newspaper.
“I think that would lead to the fragmentation of markets,” Bailey said, warning that would in turn lead to higher costs for everyone including European consumers.
The EU should instead accept healthy competition, Bailey stressed in his speech.
“I believe we have a very bright future competing in global financial markets underpinned by strong and effective common global regulatory standards,” he said.
- Reporting by AFP