Six years after Brexit formally took effect, the contest for European financial supremacy is no longer theoretical. Amsterdam has emerged as the undisputed centre for European equity trading. Paris has established itself as the leading location for investment banking operations requiring an EU regulatory perch. Dublin has become the European hub of choice for asset management and insurance. And London, while remaining by far the largest financial centre in Europe by almost every measure, has ceded meaningful ground in specific market segments.
The Amsterdam Effect
The most visible and quantifiable shift has occurred in equity trading. Following Brexit, European Union rules required that stocks listed on EU exchanges be traded on EU-regulated venues, stripping London of its longstanding dominance in European equities. Amsterdam absorbed the bulk of this activity, and the Dutch capital’s daily equity trading volumes now regularly exceed London’s in EU-listed securities.
This is not merely a technical regulatory arbitrage. The migration of EU equity trading to Amsterdam has pulled associated infrastructure — prime brokerage operations, clearing and settlement functions, market data businesses — in the same direction. Amsterdam-based financial services employment has grown by over 15,000 since Brexit, a real and accelerating trend.
Paris Punches Above Its Weight
France’s deliberate strategy of positioning Paris as the premier EU financial capital has yielded significant results. The relocation of major investment banking operations from London to Paris — including the European headquarters of Goldman Sachs’ EU-regulated entity, Deutsche Bank’s EU investment banking hub and significant operations from Morgan Stanley and JP Morgan — has added tens of thousands of high-value financial sector jobs to the French capital.
Dublin’s Quiet Revolution
Perhaps the most strategically significant post-Brexit migration has been to Dublin, which has positioned itself as the EU jurisdiction of choice for asset management and insurance. Over 100 asset managers have relocated fund domiciles or management entities to Ireland since the Brexit vote, and Dublin’s funds industry now administers over €5 trillion in assets — making it the second-largest funds centre in the world after Luxembourg.
London’s Response
The UK financial regulatory and policy establishment has not been passive. The “Edinburgh Reforms” have sought to create a more competitive regulatory environment — reducing some post-financial crisis regulatory burden on smaller firms, streamlining listing requirements to attract technology companies and creating new regulatory frameworks for digital assets and tokenised securities.
The UK-EU reset process has raised hopes in the financial services industry that some lost ground might be recovered through negotiated equivalence arrangements. But the EU has shown little appetite for a financial services deal that would allow London firms to serve EU clients without establishing substantive EU presences, and the political dynamics within Brussels — where EU-based financial centres now have a strong interest in maintaining the current arrangements — make a comprehensive financial services agreement substantially harder to achieve than it might have been in 2020.
— Sarah Mitchell, London Capital Post
