And eager\u00a0to protect their European business, all major banks and financial institutions headquartered in London started planning to move their operations to another key EU country.<\/p>\n
Plenty of European countries were eager to embrace them. \u201cIn five to 10 years, Paris will be the leading financial centre in continental Europe,\u201d predicted Benjamin Griveaux, then one of France\u2019s top economy ministers.<\/p>\n
None of this, however, has come to pass. The British economy suffered as a result of Brexit \u2013 as the process of Britain\u2019s separation from the EU is popularly known \u2013 but London continues to reign supreme as Europe\u2019s financial centre.<\/p>\n<\/p>\n
Meanwhile, Griveaux, who was one of President Emmanuel Macron\u2019s closest allies, has had to quit French politics following a scandal involving a sex video.<\/p>\n
Whatever Brexit did to the City of London, it did not dethrone it.<\/p>\n
The question is why the transfer of business that Brexit undeniably triggered never created a new European centre of gravity.<\/p>\n
Francois Villeroy de Galhau, the outgoing governor of the Bank of France, claimed in a speech on May 21 that \u201caround 2,500\u201d new banking jobs were created in his country by banks relocating their activities from London.<\/p>\n
Of the \u201chundreds\u201d of financial institutions that had to relocate to the EU following Brexit, \u201caround 60 chose France\u201d, he added.<\/p>\n
SEE ALSO<\/p>\n
Overall, the boss of France\u2019s national bank claims that around 220 billion euros (US$252\u00a0billion) worth of assets were transferred to Paris as a result of Brexit.<\/p>\n These are not small\u00a0numbers. Yet in reality, international banks based in London merely constructed EU-facing legal shells to preserve market access to Europe and staffed them to the minimum EU financial regulators would tolerate.<\/p>\n Meanwhile, the substance of their business \u2013 the traders, the deal teams, the decision-makers \u2013 remains in London. London, therefore, did not haemorrhage; it merely franchised some of its activities.<\/p>\n Other European cities competed fiercely for this business. Frankfurt, the seat of\u00a0the European Central Bank,<\/a>\u00a0claimed pride of place. Paris bent over backwards to offer quick work permits to bankers, plenty of tax-free incentives, and English-speaking schools for their children.<\/p>\n Meanwhile, Amsterdam claimed to have a global outlook and Dublin, the Irish capital, touted the fact that it spoke English, but was not England.<\/p>\n Up to a point, all these European cities grabbed a slice of the London pie.<\/p>\n Dublin took the largest share of asset management funds relocating out of Britain. Frankfurt drew banking assets, and Paris captured the largest share of jobs. And Amsterdam briefly overtook London as Europe\u2019s largest equities venue.<\/p>\n But while each EU rival carved out a niche, none succeeded in rivalling London\u2019s\u00a0concentration of the talent, support services and legal expertise required to sustain a global financial centre.<\/p>\n Brexit scattered Europe\u2019s financial functions across EU cities, and in doing so, it guaranteed that no single one could inherit London\u2019s crown.<\/p>\n The great prize was the euro-denominated derivatives clearing\u00a0market, with a notional value exceeding\u00a090 trillion euros. This remains almost entirely under the control of the London Stock Exchange Group\u2019s LCH (SwapClear) outfit.<\/p>\n The EU now obliges its firms to hold and use accounts at European clearing houses, but the financial needle has barely moved.<\/p>\n The explanation is that London possesses a set of structural rather than political advantages. English common law governs the majority of the world\u2019s cross-border financial contracts, and the English language is the operating system of global finance.<\/p>\n London\u2019s position on the meridian\u00a0allows it to trade with Asian markets in the morning and American markets in the afternoon, a geographical accident that matters.<\/p>\n But above all, London\u2019s ecosystem was developed\u00a0over three centuries of drawing together the deepest concentration of financial and professional talent in Europe.\u00a0<\/p>\n Despite all its political influence in the EU, Frankfurt could not offer the depth of markets, the density of associated financial services, or the sheer human capital of London, and bankers proved reluctant to relocate their families there.<\/p>\n Paris had its undeniable charms, but France\u2019s labour restrictions and instinct for state intervention remained a deterrent.<\/p>\n The financial inducements offered to bankers coming to Paris \u2013 a tax rate of only 30 per cent on their income compared with 45 per cent in the UK\u00a0\u2013 will expire over the next two years, which also promise to be the most politically turbulent in France\u2019s modern history.<\/p>\n Past performance is no guarantee of future success, and London does face serious competition. However, this comes from New York, Singapore and other financial centres in Asia, rather than\u00a0the EU cities that sought to capitalise on\u00a0Brexit.\u00a0<\/p>\n The London Stock Exchange, for one thing, has endured a prolonged fall in publicly traded equities. Over the past decade, the total number of listed companies has plummeted by about a third, leaving fewer than 1,600 firms on the exchange.<\/p>\n Wise, a money transfer company, completed its shift to New York in May, and AstraZeneca, the pharmaceutical giant, has openly weighed a similar move.<\/p>\n This is a genuine structural problem, made worse by the managers of British pension funds, who keep on retreating from investments in British equities.<\/p>\n However, this is a transatlantic contest between London and New York over where the world\u2019s growth companies choose to raise equity, and not one likely to benefit Paris, Frankfurt or Amsterdam.<\/p>\n When a British fintech company quits the London Stock Exchange, it lists in Manhattan, not on Euronext, the pan-European market infrastructure.<\/p>\n So, at least in the financial markets, the lessons for\u00a0the\u00a0EU<\/a>\u00a0are stark. EU regulators in Brussels can pass decrees compelling banks to keep their transactions under Union jurisdiction and away from Britain.<\/p>\n But they still cannot pass a regulation that gives Frankfurt or Paris anything resembling London\u2019s financial ecosystem.\u00a0<\/p>\n![\"Keir](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/07\/1c0b74432c784c88486937a858c04ac14f81f5f5699dc99be87de664c69d6136.webp\")
<\/a>![\"Brexit,](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/07\/f3916c7a4929720c6bbfc79b01b1640722eda78f12b015ef4a84097700efa0fd.webp\")
<\/a><\/p>\n