fcommensny conmetany ‘Commentary: Brexit's impact on London coming into focus after a few gloomy years ‘COvIp-19 as conused the pleture but sls pln tohow Londons tng away rombeing Europe's rinpaffshore nancial centr, says NatWest Groups Howard Davies. as ‘The City London nani datrctcan be seen. people wakalongthe south ofthe River Thames ami the coronavirus dssse[COVID“19outbreakin Londo, Bitsin March 1, 2024. (Photo: REUTERS Henry Nichol), Bytom a bone) (Gp 3201083009 Ss mailto%3A%3Fbody%s3Dhttps%253A%252F%252F www channelnewsasia.com%252Fnews%s252Fcommentary%252Fbr 14876346%2523LRMbcNjCmQ mailto %26subject%3D Commentary253A%2520Brexit%25E2%2580%2599s%2520imp 5e0026e53ed fd986rev=v8.28.8- wpSrer=undefined&pco=tbx. OOO® xo ‘LONDON: Neary five years alter the Brext referendum, and in the five months since Brexit itself the debate about the future ofthe City, the financial enter of London, has remained adlalogue ofthe dea. ‘Those who voted in June 2016 to leave the European Union believe, whatever the evidence tothe contrary, that the impact wll be minimal, and thatthe warnings of Job losses and business relocation ae exaggeratedRemain voters are programmed to think the opposite and, whatever the evidence to the contrary, forecast gloom and doom, What can we leatn from what has actually happened? > READ: Commentary: Super League was the last straw for football fans (/news/commentary/foothall-super-leagu senglish=premier-fan-plaver-147104722cid-h3_referral_inarticelinks. 24082018 cna) DEVELOPMENTS TODAY NOT REFLECTIVE OF BREXTT'S FULL. IMPACT Weave to acknowledge rst, that COVID-19 has confused the picture mightly over the last 8 months. People have no: found it easy o change locaton, even if they wanted to, Moreimportant, there are some temporary regulatory arrangements that blunt the impact of the United Kingdom's departure from the singe financial market, ‘Thereis a Temporary Permissions Regime in London for some EU-based firms, and the European Commission ha allowed euro-denominated instruments tobe eared in London until 2022, o avoid the discuption a sudden change on Dec 31,2020, might have brought, Sowhat weare seeing today may not reflect Brext's ful longer-term impact, SSHIPTS IN EQUITIES TRADING ‘Nonetheless, changes that have occurred so far permit us to star assessing the future ofthe Cty and the financial operations based there.People shop at markets, itskyscrpers ofthe ityof London franca strc seen hind in London Sian Jan 15,2024, (Fle photo: REUTERS/Toby Maile ‘one move that generated headlines was the abrupt shift of trading in European equities from London to Amsterdam atthe start ofthe year. An average of €9.2bllon (Uss11.2bilin) in shaees was traded daly on the Amsterdam exchange in January, fur times the volume in December 2020, while London's dally average dropped sharply, to €8.6 bllon. "The switch canbe traced to regulation: The Ruropean Commission has not granted “equivalence” to UK trading venues andis in no rush todo so. "That was aerial early goa by the Remain team in this match, you might think. But the Leave tea hit back quickly Subscribe to CNA's Commentary newsletter‘A. Thebest commentaries and anaisisto help yousee beyond the news headlines >» READ: Commentary: Harry and Meghan are made for Hollywood, not royalty (/news/commentary/harry-and-meghan-marklé royalty-netflix-spotify-deals-14588/142cid-h3_referral_inarticlelinks_24082018_cna) ‘ery fw job moves resulted from this switch, they say: Most ofthe traders remain in London. And they point out that London continues to lead Hurope a a centre for "sing new capita, Inthe ist quarter ofthis year, 8.3 billion was raised through London 1?0s, compared to €5.4 billion in Frankfurt, €5.6 billion in Amsterdam, adjust €oabillon in aris. ‘he Remain team advances again: Equities are not the only or even the most important, Instrument, The UK shar of euro- denominated {rom 40 percent to 10 percent fom uly 2020 to January 202, while the BU share rose from 10 percent t025 percent > READ: Commentary: EU accomplishes its mission of limiting damage from Brexit (/news/commentary/brexit-deal-britain-united~ ‘kingdom-european-unjon-138/09487cid-h3_xeferral_inarticlelinks_24082018_cna) New York was the beneficiary of some of the business lotto London, as many forecasted And they point tothe move of banking assets worth pethaps € tlio out ofthe UK, mainly to Frankfur, ‘Buc oth sides acknowledge that from an economic pont of view the city in which trades are booked i les significant than the city in whic traders pay ther taxes. ‘Soon after the Brexit vote, consultants Oliver Wyman estimated that 75,000 jobs would quickly be relocated to othe ‘estimates. Have thse pessimist forecasts been borne out? centres, Others produced even higher ‘The Leave team ean claim another goal. detalled survey fom consultancy New Financial lat month identified 7,400 postions that had been moved from London to eurozone nancial centre ~ Just 10 percent ofthe estimates n 2016. The biggest beneficaries have een Dublin Parks, Luxembourg, Frankfurt and Amsterdam, in that order.‘A generlviw shows the Bank of England and Cty of Lonéen fan strict, Nov 5. 2020Flephoo: REUTERSohn Sibley ‘Buc the study canbe interpreted in another way. Two years ago the same authors identified 269 firms that had relocated some activity [Now they find that 440 have done so, and they regard that as an underestimate ofthe number that will eventually do so. They expect the relocated jobs number to rise further _Moreover, there are signs thatthe property market may be reacting, Over the lst two years, property pices have risen 20 percent in Paris, almost 4o percent in Amsterdam, but Just 6 pe ent in London, ‘But it will not be one-way trafic. Just as firms based inthe UK no longer have unfettered access tothe EU's markets, so most EU-Ioeated firms will need authorisation to conduct business with London-based ellen SOME OUTFLOW OF JOBS1ethaps 300 to S00, mainly smaller, European firms wll need cal widely expected in 2016, spin London. The net result willbe an outflow of jobs from London, but not on anything Ike That is because irms have found ways to workaround the regulatory obstacles. They have also found that moving staffs costly and difficult London retains many attractions; Schools, cultural fe, and many long-established expatriate soctal networks, Iwi take tle for any putative val inthe EV to READ: Commentary: Brexit is just not worth it anymore (/news/commentary/brexit-european-union-no=deal-most-likely=referendum= second-114297927eid-h3, referral inarticlelinks 24082018 cna) > READ: Commentary: Boris Johnson’s COVID-19 illness has made him more powerful (/news/commentary/boris-johnson-has-become- ‘more-popular-after-covid-19-coronavirus-12639436?cid=3_referral_inarticlelinks 24082018 cna) For the EU, London wil shift from being its principal onshore financial entre, toan important offshore centre. Other ci are that a multipolar system will develop, with no single winner. es wll pick up business, though the signs ‘There wil stillbea profitable cole for London, but the gokden age ofthe city as Europe's fsanctal capital wil recede, a8 golden ages tend to do, Howard Daves is Chairman of NatWest Group Source: Projet Syniate/st ‘Tagged Topics eon hte chaenlaewesacominewsonifbes)ondon hits inva chanelncwadacon/news\onconde. Eure ism shannon comvnews tence) foanclacenc taser soewshon " @ ul ee onutedioct j2aDDhtins}4253A%252F9%4252F www channelnewsasia.coms252Fnews%252Fcommentary%4252Fbr impact: london Copyright® Medico 202. Nediaorp Pe i Alright reseed