Competition for the future of European capital markets -British simulation games about Brexit- by Thomas Seidel

Discussion at the Frankfurt Finance Summit
(Source: Thomas Seidel)

At the edge of this week Frankfurt Finance Summit, which gathers senior financial industry representatives each year, we took the opportunity to meet British government representative Katherine Braddick for an exclusive and very brief background information on the state of ubiquitous Brexit.

The director of the British Ministry of Finance describes the extent of the work because of Brexit in the British government. For example, her area is over 50 percent burdened with Brexit tasks. Of course one is in the face of such a unique situation in a governmental state of exception. This also applies to the working level at the regulators and central banks between Great Britain and the EU. For example, it is already apparent that there could be problems with contracts with very long cycles (terms of 5 years and longer). At present it is impossible to see how regulators will handle such transactions in the future.

But Brexit has by far not only effects on the financial industry. For many companies affected by the withdrawal decision, this is an essential issue. Above all, British banks are relocating to Europe, where they want to ensure a qualitative continuation of their customer service. Above all, the historical advantage of the British financial industry was the availability of real talents in this industry.

Katherine Braddick (very left)
(Source: Thomas Seidel)

Competition in capital market business

So far, London is the only major capital marketplace in Europe. With Brexit, this market will in future be outside the European Union. We spoke to Mrs. Braddick about the efforts to establish a new European capital market exchange in Luxembourg (we had already reported on it in detail). Obviously such aspirations in the British government are very sporty. One is prepared to compete in the capital market in the future. However, problems arise when business in Luxembourg begins to industrialize, in other words, to approach the UK capital market in terms of volume and transaction numbers.

Getting business contacts at the Frankfurt Finance Summit
(Source: Thomas Seidel)

Shift of focus

With the withdrawal from the European Union, the focus of the whole British economy will certainly shift. During Britain's over forty-year membership of the EU, relations with the formerly colonial Commonwealth of Nations may have been neglected. That will definitely change. In particular, trade with Canada and Australia, and not least the United States, will become increasingly important for Great Britain in the future. It seems that the British Government is willing to turn away from Europe in the future.