London’s status as Europe’s ‘financial hub’ is likely to remain for the foreseeable future according to Reuters news reports.
It comes as the ambitions of Frankfurt to acquire a substantial amount of business from London following Brexit have been hindered by the coronavirus pandemic and the significantly slower global growth rates of this year.
The EU will undeniably see forging its own financial ecosystem as a foremost priority following the UK’s departure at the end of the year, as it seeks to bolster the position of the Euro compared to other currencies.
Eurex Clearing board member Matthias Graulich told Reuters: “There is a slower growth path than we initially had expected for the second half of this year primarily due to COVID-19 and its implications, but everything is going in the right direction to achieve our goals.
“It is extremely difficult to say where we are on the journey to achieve our goals by 31 Dec, a year-end is not a magic date if you are building a business, it is more relevant that the trajectory is up and we make month-by-month progress.”
Previously speaking to Payment Expert, PXP Financial’s Group CEO Koen Vanpraet stated his opinion on whether the UK capital can retain its status following Brexit: “Honestly, I think there were horror stories about less employment and jobs moving to Frankfurt and other financial hubs throughout Europe. But I think that will balance itself back to normal.
“Once again, we go beyond the lack of clarity and decisions that are being made. London will reside as a very important financial hub. Yes, other countries might grow a little bit more into it, there will be healthy competitions between countries, but you don’t take that away.”
He concluded: “This is years and years of building up of expertise and I think it very much comes down to that expertise.”
This week, UK and EU negotiators recommenced negotiations following the European summer break, in which both parties are seeking to deliver a final bilateral trade agreement by the end of October, avoiding a No Deal scenario.
Led by Chief Negotiator David Frost, the UK government maintains that it must maintain future independence from EU rules and standards on business policy, immigration, worker protections, industry subsidies and competition rules.
Meanwhile, the EU maintains that the UK cannot expect any preferential treatment if it seeks to maintain access to EU markets and services, in which the country must abide by the rules established by the 28 member trade bloc, in which European Courts must act as legal adjudicator.
Closing July, the European Banking Authority (EBA), the EU’s regulatory oversight agency for financial services, warned British incumbents that there would be ‘no reprieve or extension’ bridging access to EU markets, should negotiations deliver a no deal scenario.
“Transitional arrangements will not be extended in any shape or form beyond the 31 December deadline” the EBA stated in its warning to British business.
Meanwhile, Bank of England Governor Andrew Bailey has stated to leadership of FTSE banks and lending institutions to prepare their businesses and funds for a ‘No Deal Outcome’ – in which ‘leaders had to accept and prepare for the worst scenario.
