Finance fragmented? Frankfurt and Paris as European financial centres after Brexit

Lavery, Scott; McDaniel, Sean; Schmid, Davide

doi:10.1080/13501763.2018.1534876

Cited by 27 publications

(16 citation statements)

References 26 publications

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“…This provided a crucial background to the Leave decision in the 2016 Brexit referendum, throughout which City firms overwhelmingly supported a vote to remain. As such, authors have turned their attention towards the threat to the City of an impending exit from the EU Single Market, generally identifying the potential for alternative financial hubs to pick off business from the UK (Lavery et al, 2019, Howarth & Quaglia, 2018cf. Ringe, 2018).…”

Section: The Brexit Threatmentioning

confidence: 99%

Brexit for finance? Structural interdependence as a source of financial political power within UK-EU withdrawal negotiations

Kalaitzake

2020

Review of International Political Economy

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For most analysts, Brexit reveals the highly contingent power of finance and the clear limits to its ability to influence crucial policymaking outcomes. By contrast, I contend that UK-EU negotiations demonstrate the unique capacity of finance to secure substantial commercial protections relative to all other business sectors and that the structural sources of the City's political power remain exceptionally robust. Elaborating a notion of 'structural interdependence', the paper demonstrates how policy officials on both sides came to perceive that the future prosperity and stability of their economies relied upon maintaining open trading relations in financial services. This necessitated broad continuity in access to London's deep financial markets for EU firms and preservation of the City's leading role in the UK growth regime. In establishing these claims empirically, I document an extensive range of contingency measures designed throughout December 2018-April 2019 that would function to protect the financial industry from economic disruption in the event of a no-deal Brexit. The outcome illustrates how finance benefits from a form of structural power that does not require instrumental mobilisation, but rather shapes policy decisions on the basis of deeply entrenched and commercially vital cross-border financial entanglements.

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Section: The Brexit Threatmentioning

confidence: 99%

Brexit for finance? Structural interdependence as a source of financial political power within UK-EU withdrawal negotiations

Kalaitzake

2020

Review of International Political Economy

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“…21 When that option was ruled out, US banks were pivotal in persuading The CityUK to back a bespoke deal based on mutual recognition. By contrast, European banks with a large presence in the City tended to remain on the sidelines, for fear of offending their home governments (Lavery et al, 2019). 22 A second group -composed of UK retail banks and the largest firms in the investment fund and insurance sectors -also sought to minimise the economic disruption from Brexit, but for different reasons.…”

Section: Brexit and Discursive Fragmentationmentioning

confidence: 99%

From Big Bang to Brexit: The City of London and the Discursive Power of Finance

2021

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This article aims to generate new insights into the City’s influence during the Brexit negotiations. Integrating theories of discursive institutionalism and business power, we set out to analyse the dynamic ‘discursive power’ of finance. From this perspective, a key source of the City’s influence historically has been a powerful strategic discourse about London’s role as Europe’s leading global financial centre. This was strengthened following the financial crisis to emphasise its contribution to the ‘real’ economy and emerging regulatory threats from the EU. We argue that Brexit challenges the City’s discursive power by removing ‘ideational constraints’ on acceptable policy discourse, and undermining the ‘discursive co-production’ of financial power by government and industry. By encouraging financial actors to re-evaluate their interests, this has contributed to increasing discursive fragmentation and incoherence. Evidence for this comes from the City’s ambiguous policy preferences on Brexit, and the emergence of a rival pro-Brexit ‘discursive coalition’.

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“…In practice, the changes to the financial sector post-Brexit will be determined by the intersection of both of these economic and political networks, although the approach to Brexit of each group is different (Lavery et al, 2019). Economic actors tend to view Brexit as a negative-sum game whereby London and other financial centres are set to lose out as a result of London leaving the EU Single Market.…”

Section: Financial Fragmentation In Europementioning

confidence: 99%

“…The council of the Île-de- France region has been active in both a PR campaign to improve the image of Paris as a city open to finance and business and the facilitation of initiatives such as ‘Choose Paris Region’, a ‘one-stop shop for simplifying procedures for foreign investors’. (Lavery et al, 2019: 1507–1508)…”

Section: Financial Fragmentation In Europementioning

confidence: 99%

“…Whilst Europe’s financial centres will benefit from local and national political support in luring activities away from London through media campaigns and regulatory inducements, the mid-tier and emerging financial centres are characterised by a lack of political power to resist the concentration of activities in London. The contrast is most stark between the UK and Germany, where strong local and regional government has been influential in Frankfurt’s emergence as a banking hub within the Single Market (Lavery et al, 2018, 2019; Wojcik and MacDonald-Korth, 2015). In Germany, the 16 Länder have a formal channel of communication into Germany’s Brexit stance through the Bund-Länder Arbeitsgruppe (federal–regional working group).…”

Section: The Concentration Of Financial Services In the Ukmentioning

confidence: 99%

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The emerging geography of European financial centres: Fragmentation in the European Union and concentration in the UK?

Heneghan

Hall

2020

European Urban and Regional Studies

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The United Kingdom’s (UK) withdrawal from the European Union (EU) will reshape the geography of European finance. From January 2021, the UK will no longer be able to sell financial services cross-border into the EU’s Single Market as it has done as a Member State. Through what are called passporting rights, these financial services exports from London to the EU have been central to London’s competitiveness as an international financial centre and the wider importance of financial services in the UK’s political economy. They have also provided a range of financial services to businesses and individuals in Europe. In this commentary, we examine the implications of Brexit for the financial services sector and for conceptual understandings of finance in economic geography and cognate social sciences. We argue that at the European scale, Brexit is giving rise to growing fragmentation of financial services to a range of European financial centres. Meanwhile, within the UK, finance is likely to become more concentrated in London as renewed processes of spatial concentration that have characterised previous economic shocks develop. Our analysis shows that that in order to understand these seemingly diverging geographies it is necessary to understand financial services as both economic and political practices.

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Finance fragmented? Frankfurt and Paris as European financial centres after Brexit

Cited by 27 publications

References 26 publications

Brexit for finance? Structural interdependence as a source of financial political power within UK-EU withdrawal negotiations

Brexit for finance? Structural interdependence as a source of financial political power within UK-EU withdrawal negotiations

From Big Bang to Brexit: The City of London and the Discursive Power of Finance

The emerging geography of European financial centres: Fragmentation in the European Union and concentration in the UK?

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