Adonis Diaries

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By Silla Brush. March 26, 2021,

A month after Britain voted to leave the European Union, Boris Johnson was asked whether he thought the finance industry would keep its rights to trade freely in the bloc. “I do, I do,” he told reporters. It was never that simple. 

Half a decade later, billions of dollars in assets and thousands of jobs have moved to the continent after the U.K. negotiated a bare-bones trade deal with the EU that largely sidelined finance, giving cities across the bloc the chance to lure firms in flux.

While the two sides may be just about to ink an agreement to cooperate on financial regulation, neither expects the return of business as usual.

European cities like Amsterdam, Dublin, Frankfurt and Paris have each captured some of the shifts so far, although none has emerged as the clear winner yet.

Some of these changes, like share trading volumes, happened overnight. 

In other areas, like jobs, it is more of a slow drift as firms and individuals try to work out which city in the evolving post-Brexit landscape suits them best. 

Dutch Domain

Amsterdam toppled London as Europe’s share trading capital after Brexit

Source: Cboe Global Markets

Note: Figures reflect average daily value of shares traded

“We will have Frankfurt, Amsterdam, Paris and Dublin all in the mix to take some part of the financial system,” Mairead McGuinness, the bloc’s commissioner for financial services told journalists in March. “Markets will decide that and are probably best placed to do that.”

The situation remains fluid and the eventual outcome uncertain.

The U.K. and EU are due to sign a memo of understanding at the end of March to cooperate on financial rules, which might smooth the path to greater access for British firms through so-called equivalence rulings in future. 

Some flows might change direction as the U.K. starts to set its own rules outside the single market, while areas key to London’s decades-long dominance as a financial center — including the clearing of trades — have proven sticky so far. 

“I don’t think you can create a financial center,” said Douglas Flint, chairman of U.K. fund manager Standard Life Aberdeen. “The EU’s challenge is one of where do you choose to locate such a center and how do you get other EU competing countries to cede whatever activities they host.”

But if the first three months of 2021 are any indication, Brexit could remake financial centers across Europe in the coming years.

Here’s what has happened so far:

Share Trading

European equity markets opened on Jan. 4 to a once-in-generation, “big bang” shift.

Nearly all of the trading volume in shares of European companies that was handled in in the U.K. bolted to the EU.

London soon lost its crown to Amsterdam as the continent’s top place to buy and sell shares. Trading in Swiss equities, which had been blocked while Britain was a member of the EU, resumed in February, helping to increase business on U.K. platforms.

Britain is now hoping to boost equity markets by making it easier for companies to go public in London.

Amsterdam Rising

Trading in EU shares bolted from London when markets opened in January

Source: Cboe Global Markets

Swaps Trading

London has long been a global center for interest rate swaps trading, recently beating out New York and cities across Europe and Asia.

But the City took a hit to its dominance after the EU blocked firms based inside its borders from trading certain benchmark contracts on London-based platforms.

Seeing a rupture in markets between the EU and U.K.,  some banks routed business to Wall Street instead, where both jurisdictions allow trading, although London is still a dominant player when off-facility trading is included.

Swaps Switch

London trading venues see business flee to Wall Street, Europe

Source: IHS Markit

Note: Market shares for on-venue trading. Off-facility trading isn’t included.

Derivatives Clearing

One key part of the financial market has yet to face much disruption: derivatives clearing.

London Stock Exchange Group Plc’s clearinghouse, LCH, won a decision from the EU that allows it to handle European business through June 2022.

The EU is making clear, though, that it wants the balance of power to shift, drawing more euro-denominated business inside its borders. The Bank of England has already vowed that the U.K. will resist any EU move to force business to relocate.

Clearing Prize

London’s LCH clearinghouse dominates euro interest rate swap marke


Source: Clarus Financial Technology

Note: Market share is for cleared notional business

Investment Banking

Initial public offerings are another area where the Square Mile continues to overshadow its continental rivals.

Listings in the U.K. are firmly on course for a record first quarter, with companies from bootmaker Dr. Martens to Russian discount retailer Fix Price raising a combined $7.2 billion. That’s before the U.K. government’s proposed loosening of listing requirements takes effect.

Lion’s Share

London’s IPO market is on track for a record first quarter

Source: Bloomberg

Note: Data is for 2021 IPO proceeds through March 24

M&A bankers are also enjoying a bumper year. 

Foreign companies’ acquisitions in the U.K. have nearly tripled this year to $66 billion, a record for that time period, according to data compiled by Bloomberg.

Takeovers of publicly-traded U.K. companies have risen more than sevenfold. This may reflect weakness rather than strength.

British companies have become more vulnerable targets as the valuation gap between local stocks and other major markets widened over the past year.

Jobs and Assets

Finance firms have announced that about 7,600 jobs will move from the U.K. to the bloc, according to a study by consultancy EY.

About 1.3 trillion pounds ($1.8 trillion) of assets are also on the move.

Dublin has attracted the largest absolute numbers of firms of all types relocating to the bloc. Frankfurt and Paris have also been popular among larger firms like universal banks, investment banks and brokerages.

London’s Loss

Thousands of finance jobs have relocated to the EU since Brexit

Source: EY, Bloomberg estimates

Note: Figures are approximate

Property Prices

While tax changes and a comparatively sluggish U.K. economy have had the biggest impact on property prices, Brexit uncertainty and the migration of Brexit bankers may be exacerbating existing trends in property prices.

Since the U.K. voted to leave the EU, London property prices have increased by 6%, compared to a fifth in Dublin and Amsterdam’s 40% rise.

Home Alone

London property gains trail EU hubs’ since Brexit referendum

Source: Knight Frank research

Note: Prices are for mainstream properties, rebased to 2016

— With assistance by Aoife White, Swetha Gopinath, Ben Scent, Jack Sidders, and Jeremy Diamond




May 2023

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