On a knife edge: Brexit and financial services

Michaela Rysava

A chapter in CNB Global Economic Outlook - April 2021, 2021, pp 12-17 from Czech National Bank, Research and Statistics Department

Abstract: The optimism that followed the signing of the EU-UK trade deal in December is slowly waning, as many questions remain unanswered. Financial services and their cross-border provision were omitted from the agreement, despite the importance of this industry for the UK. A breakdown of relations due to Brexit and considerable uncertainty on financial markets have led to a migration of financial institutions and their assets and employees. Despite newly emerging financial hubs in Europe, the City of London still maintains one of the world's leaders. The UK's loss of unrestricted access to the EU financial market has weakened global trade in financial services. Even the signing of a memorandum of understanding on regulatory cooperation in financial services between the EU and the UK will not salvage the situation. The financial services industry expects support in the future from the UK government, as this will be essential to the economic recovery from the COVID-19 pandemic.

Date: 2021
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