Is the City of London No Longer the Premier Financial Capital of Europe?

The City of London, The Square Mile or the affectionate term which has been used since the 1950’s “The City”, has, since Brexit, come under considerable pressure from Paris, as the financial centre of Europe. Sadly, the Brexit deal was bereft of any financial services agreements, and considering the city was earning 10% of GDP and provided 11.5% of tax receipts, this has been an unmitigated disaster both for the City itself and the British economy. 

An Exodus

It is estimated that in excess of 7,500 personnel and £1.1 trillion in assets had already fled the City to the European Union prior to the Brexit agreement. Back in November 2022, Bloomberg’s released figures showing that in US Dollar terms primary listings in Paris overtook London, and to add insult to injury, Paris is now home to Europe’s largest stock market by value. 

Even Wall Street is benefiting from the demise of the City as ARM, the titan of the UK’s Tech Sector announced it would do its IPO in New York, whilst CRH (the world’s biggest materials supplier), announced it would move its primary listing to the USA. This in itself is an indictment on the City, and further bad news may be lurking on the horizon with rumours that the City’s largest listed company Shell, may be considering upping sticks and moving to another jurisdiction.

As far as the City is concerned there was no Brexit deal. The City has already lost in excess of €6 billion to Paris and Amsterdam in euro trading revenues, and staff have been repositioned in various centres of Europe, with Paris being the major beneficiary. Even before Brexit, many of the big city firms anticipated that the City would be bereft of a Brexit deal, and as such companies such as Bank of America are now headquartered in Dublin, and in Paris they have opened a trading floor with a capacity for 1,000 traders and back-up staff.

The Post-Brexit Landscape

As of Q2 2023, the financial landscape post-Brexit had changed dramatically with a clear shift being seen across the English Channel, especially from the big Wall Street companies with the spoils being split amongst various EU cities, of which the lion’s share has gone to Paris. For example, Goldman Sachs co-head in Paris confirmed that Paris is their largest trading hub in Europe, with their staff at the global markets team more than doubling in the last two years. The staff at Bank of America Paris has increased by 600% since the 2016 Brexit vote, whilst JPMorgan Chase has increased their staff more than 20-fold since 2019. Currently Citigroup is building a new trading floor and even hedge funds have increased their staff, such as Millennium Management who circa doubled their employees in the last year.

The ‘ Edinburgh Reforms’

The UK government is so alarmed they have put in place the “Edinburgh Reforms”, which is, for the first time in twenty years, a major revamping of Britain’s financial services spanning insurance, asset management, capital markets and banking. This, they hope, will stop the haemorrhaging, and hopefully from a capital markets standpoint, the City will be able to provide a first-class and best possible funding environment for both global and UK companies.

However, all is not lost for the City, as over USD 3.8 trillion of foreign exchange trades (forex) are transacted in London, which is more than the combined forex trades of Tokyo, Hong Kong, Singapore and New York. Furthermore, according to the London Stock Exchange, 70% of global secondary bond market trading takes place in the City. The City, unbeknownst to many, is also the third largest fintech hub in the world. 


With regard to European finance, the City and London in general still remains the big fish in a big pond with their headcount still way above what the rest of Europe has to offer. It is still much bigger in terms of volume of business and assets, but since Brexit their status has been somewhat eroded. In essence, some of the companies who would use the City as the “default location” to obtain capital from the bond and stock markets are now looking elsewhere. 

The lack of access to EU markets and clients will continue to hamper the city for years to come and it is hoped that the City will be able to reverse the outflow of traders to Europe, otherwise their standing in the global financial markets will continue to diminish.