Brexit make another hit on City Of London

The British government has proposed to put an end to one of the biggest privileges for the island's financial industry. The proposal aims to maintain current trade agreements with regard to goods, but, as far as services are concerned, they fall.

The government's vision is for an economic partnership that includes new economic and regulatory measures for financial services, preserving the mutual benefits of integrated markets, and safeguarding financial stability while respecting UK and EU laws as regulators.

The current EU regime allows island based financial services companies to have customers in the EU. Termination of this regime means that companies based in City Of London will need additional licenses to serve EU customers.

This may be a particularly big problem for big US investment banks that rely on their Canary Wharf offices to serve their European customers.

At present, European assets under management coming from the mainland are worth nearly $2 trillion.

The law has not yet entered into force, but if it does, it will certainly stimulate the migration of large banks to Frankfurt and Paris.

Source: CNBC

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