For post-Brexit London, the bad news keeps on coming. In February, the city lost its title as Europe’s top share-trading hub to Amsterdam, while the movement of up to €100bn in Irish securities from settlement house Euroclear’s London operations to its Belgian counterpart was announced in March, following a two-year effort. Seemingly, the city’s loss of blanket passporting rights with the EU has dented its status as a global financial centre. Yet, it is far from certain that the City of London is entering a phase of relative decline. Beyond the headlines, work is afoot to reposition the capital for a future that, in all likelihood, will broadly exist outside of the EU’s equivalency regime.
In the opening months of 2021, the mood music between the UK and EU was not encouraging. The Irish ambassador to the EU, Thomas Hanney, stated in March that he was not “overly-optimistic” about a strong equivalence regime in the future. In a similar vein, the governor of the Bank of England, Andrew Bailey, during a February speech at the annual Mansion House dinner, accused the EU of holding the UK financial services sector to equivalency standards that it applied to no other jurisdiction. Broader trade tensions between the two sides were also escalating. But what, if anything, can London’s present difficulties tell us about its future as a share trading and financial centre?
