UK capital lost significant ground in the first Global Financial Centers Index published since the UK completed its exit from the European Union, barely holding onto its No. 2 ranking.
London’s rating has fallen 23 points since the previous edition, compiled by think tank Z / Yen, released in September. London is now just one point ahead of Shanghai, and Hong Kong and Singapore are not far behind.
The ranking is created by combining assessments of financial professionals with quantitative benchmarks from third parties, including the World Bank, the Organization for Economic Co-operation and Development and the United Nations.
Billions of dollars in stock and derivatives trading have already disappeared from London since Brexit was finalized on January 1 and shifted abroad to cities such as Amsterdam, Paris and Frankfurt, home to the European Central Bank.
Frankfurt’s rating was up 12 points in the latest Z / Yen index, while Milan was up 28 points. Paris and Amsterdam saw their viewing figures weaken.
The threat of more lost business looms over London, home to dozens of the world’s largest banks, hedge funds and insurance companies.
Financial services were not part of the UK-EU trade deal agreed by British Prime Minister Boris Johnson in December, allowing Brussels to decide how much access to the large EU market will be given.
“I am not predicting the end of London as a major financial center, but I think it is in the most precarious state it has been in for a long time and cannot be complacent,” said Alasdair Haynes, the CEO of Aquis Exchange. emerging rival. to the London Stock Exchange and the CBOE, CNN Business told in February.
London still remains a draw for talent. And many financial institutions hope to get people back to the office as soon as possible.