Billions of pounds in EU share dealing was rerouted out of London and into new European hubs on the first day of trading this week.
According to Refinitiv data disclosed in a Financial Times report some €6 billion was moved to EU marketplaces or back to primary exchanges such as the Madrid, Frankfurt and Paris.
It follows warnings during the Brexit transition period that restrictions could see London lose its mantle as the financial capital of Europe to hubs operating within the single market without borders or restrictions.
The UK’s trade deal with the EU largely omitted financial services, with Boris Johnson even admitting in that regard the deal “perhaps does not go as far as we would like”.
Commenting on the first day of activity within the new framework, Alasdair Haynes, chief executive of Aquis Exchange, told the FT:
“It’s been an extraordinary day. Shifting liquidity is one of the hardest things to do. It’s not ‘Big Bang’ — it’s ‘Bang and It’s Gone’. The City has lost its European share business.”
Although not the City’s most lucrative business, the departure of the share trading will mean less in tax receipts for the UK government.
Mr Haynes also noted that it could encourage companies to list in the EU to benefit from smoother, more active trading conditions.
This time last year, shortly after Johnson’s election landslide, several major financial firms made plans to up sticks and move out of the capital.
Investment bank JP Morgan Chase purchased a new building in Paris capable of holding 450 people, while Bank of America opened a new French subsidiary that employs a similar number of people, most of whom were previously based in London.
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