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The Brexit process has begun to unravel the supremacy of London as the financial centre of Europe, yet it remains unclear how the map of the EU’s financial system will eventually be refigured.

Several cities have emerged to compete not only for the business that is leaving the UK’s capital but for new investment as well. This raises broader questions about whether it is more beneficial to have a single hub or to spread financial services across numerous locations. It also poses difficulties for firms that relocate, some of whose general staff may prefer a different destination to that desired by the lawyers and compliance officers.

Brexit has set in motion events that will not be undone even if the UK were to throw the process in full reverse, and remain in the EU, and the idea has been mooted that Brexit merely accelerated a desertion of London that may have happened in any case. Still, the future landscape of the EU’s financial services industry will still largely depend on the final shape of the UK’s future relationship with the EU. Broadly, observers would expect a harder Brexit to yield a swifter and more seismic movement away from London.

In this episode of the Bruegel Backstage podcast series, Bruegel visiting fellow Rebecca Christie and senior fellow Nicolas Véron discuss the early developments in this direction, and the likeliest areas of future progression.

Each of the discussants made presentations at the Bruegel event ‘The emerging new geography of financial centers in Europe’, which was conducted under the Chatham House rule.

For further reading, we recommend this article written by Nicolas Véron about the relocation of banking business from London to elsewhere in Europe in the wake of the Brexit referendum vote.