Posts Tagged ‘united kingdom’
[URBAN NOTE] “Brexit threatens London’s status as ‘best city in the world’ — even if nothing changes”
Lianna Brinded’s Business Insider article makes a point that is all the more sadly ironic on account of London’s mostly anti-Brexit vote in the recent referendum.
PwC, in collaboration with BAV Consulting, surveyed a group of 5,200 people from 16 countries about where they believe the best cities in the world to be.
The demographic was made up of “an equal number of business decision makers, informed elites, and other general population adults over 18 years of age.”
London hit the number one spot in the ranking of 30 best cities in the world after the respondents scored the capital highly across 40 metrics, which included infrastructure, influence in terms of economics, politics, as well as culture, entertainment, and great food.
Matthew Lieberman, a director at PwC, told BI that Brexit could damage the perception of London as an open city and this could have a negative impact on the country overall.
“London scores number one in the metric ‘connected to the rest of the world,’ number two in political influence and number two in being a leader; these attributes are contributing to London’s position as the number one city overall – but they could foreseeably be impacted by Brexit,” said Lieberman.
“We’ll have to see if it manages to keep the same ranking next year, or if, due to Brexit, we see a slip. We do not currently have empirical data on this, but based on judgment and anecdotal evidence, we would presume that there’s still a lot of uncertainty and perceptions are in flux.”
Bloomberg’s Gavin Finch notes that New York City, not necessarily any single European centre, could benefit the most from the decline of London post-Brexit as a financial centre.
New York, even more than Frankfurt or Paris, is emerging as a top candidate to lure banking talent if London’s finance industry is damaged by Britain’s divorce from the European Union, according to politicians and industry executives.
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That’s because the largest U.S. city, rather than European finance hubs, is the place that rivals the depth of markets, breadth of expertise or regulatory appeal boasted by London. Continental Europe will win some bank operations to satisfy regional rules ensure time-zone-friendly access to its market, but more may eventually shift across the Atlantic to the only other one-stop shop for business.
“There is no way in the EU there is a center with the infrastructure or regulatory infrastructure to take the role London has,” particularly in capital markets, John Nelson, chairman of Lloyd’s of London, said in an interview. “There is only one city in the world that can, and that is New York.”
For many global investment banks, London is their largest or second-biggest headquarters. If the benefits of scale are diminished by having to move roles to Europe, banks may look to shrink their London operations even further by moving any workers able to do their job just as well from a different time zone, including global-facing roles in merger advisory, trading and back-office technology and finance.
Additional jobs may move as specific trading activities seek a new epicenter. London Stock Exchange Group Plc Chief Executive Officer Xavier Rolet was blunt, saying that if Brexit strips London of the ability to clear euro derivatives trades, the entire business would move to the only other city able to clear all 17 major currencies: New York.