Forty years ago, in the early 1980s, banks with offices in Britain had a much larger cross-border presence than banks in Germany and France. This emerges from data available to the Bank for International Settlements and cites a report in the British newspaper Financial Times. According to the relevant publication, the big international banks use the City of London for the issuance of syndicated loans that end up in foreign clients. The City of London is attracting assets to manage the transactions and liquidity of major banks, from Britain’s Barclays to major US investors such as Goldman Sachs. The impending Brexit, of course, has forced many banks to transfer their assets and branches to other financial centers within the EU.
According to data from the data company Oliver Wyman, the UK’s general banking sector employs more than 100,000 people, while at least another 80,000 work in related industries such as wealth management, data providers and financial services technology companies, the so-called fintech . Since 2015, however, the number of employees in the industry has decreased by about 5,000 people.
London is the ideal financial center for currency trading and derivative interest rates. Its geographical location gives stockbrokers and traders of all kinds the opportunity to catch the end of the day in Asian markets, but also the beginning of the Wall Street meeting. Its ideal geographical location is combined with a high quality technological infrastructure. Thus London represents about 43% of the daily turnover of 6.6 trillion. dollars of the foreign exchange market, but also half of the daily transactions in interest rate derivatives amounting to 6.5 trillion. dollars. And these aspects of the market have not been hit by the impending Brexit.
For years, New York has overshadowed London, as it has become the dominant center for listing companies. This year, listing of companies on the Nasdaq and New York stock exchanges raised a total of $ 150 billion from the initial public offering of business giants, such as that of Airbnb. In front of them are the corresponding 6 billion dollars on the London Stock Exchange. According to the British newspaper, fast-growing companies tend to prefer the stock markets of Asia and the US, and London probably can not claim the top again.
According to the Investment Association, portfolio managers in London supervise assets worth 11.4 trillion. dollars on behalf of savers in various investment schemes. This makes London the first and foremost investment management center in Europe and the second largest in the world after the United States. The assets managed by various investment firms in London have tripled since 2009. And of course, London has increased its share of the global market to the detriment of other European metropolises in France and Germany.
The pandemic caused a sharp drop in activity in London, as office workers and shopkeepers, as well as tourists, were forced to stay indoors. After nine months, recovery remains limited. Businesses in the City of London, an area dominated by skyscrapers with offices and minimal tenants, are now particularly vulnerable. The 12 largest foreign banks had a total of more than 70,000 employees at the time of the referendum. Their positions were considered extremely precarious due to Brexit, as some customers and certain activities will henceforth have to be served by EU countries. Almost five years have passed since the referendum and so far job cuts have been few. But jobs have been lost for other reasons, such as the restructuring of Credit Suisse and Deutsche Bank.