Brexit and the Financial Sector in Europe: Bye-Bye London?

On 23 June 2016, the British People voted out of the EU. Brexit will trigger long and complex “divorce” negotiations on a wide range of topics. These negotiations are likely to drag on and will be followed by another negotiation on a new cooperation agreement. There will be substantial consequences for the European financial sector. As number one financial centre in Europe, London benefits fully from the European financial “passport” system, that is being put into question. The City is going to try and preserve its access to the Single Market, with few chances of success as PM Theresa May is leading Britain towards a “hard Brexit” – which means taking the country out of the Single market. Britain's financial sector still hopes to benefit from a transitory period and an equivalence regime after Brexit, allowing its companies to sell financial products without the need of having every EU member States authorising them. In the meantime, in response to the uncertainty surrounding negotiations, London based companies started to relocate some of their activities on the Continent.