As an international financial center, the U.K. dominates its European neighbors, according to a new index published today by London think tank New Financial.
New Financial, underwritten by a finance networking group, promotes more inclusive capital markets. Its index uses 28 financial metrics to quantify the size and scope of 48 countries’ markets.
The U.S. scores 79 out of a 100 as an overall financial center in the index, followed by the U.K. at 40. The next European countries on the index, Luxembourg, Germany and France, have scores between two thirds and a half of the U.K.’s. The report’s authors write that “the UK’s lead over other European financial centres (particularly in international financial activity) is much bigger than other rankings would suggest.”
For Brexit supporters, this could serve as ammunition to say that Europe needs British financial markets more than the other way around. However, the index doesn’t compare the U.K. market to the remaining 27 EU countries combined.
Instead, it provides a way for European countries jockeying to take some of the U.K.’s finance business to compare their relative growth before and after Brexit.
Brexit has already taken a toll on the British pound and many corporations have complained loudly about what it will cost them. The British government has taken a disaster-preparedness approach to the possibility of a no-deal Brexit, seeking to warn citizens and businesses what changes they might expect in the resulting legal vacuum.
Of course, each sector of Britain’s powerful financial industry see different opportunities and costs in Brexit, as a Wall Street Journal feature explains today.
The New Financial report also noted that four of the top 10 financial centers are in Asia and that they are growing fast. Asian growth may soon make squabbles among European nations look petty.