London has for decades been recognized as one of the world's financial centers. In fact, for the five years leading up to 2018, one global financial center index pegged it as the top financial hub in the world. That changed in 2018 when New York took the top spot, according to consultancy Z/yen.
In the firm's latest report, London had lost further ground and is in danger of being passed by Paris and financial centers in China. The reported cause of the drop in stature was, unsurprisingly, uncertainty over Brexit.
As the Brexit deadline moved once again - now to January 31, 2020 - the financial industry continues its watch on what that will mean for London, a major center for FX, derivatives, clearing, swaps and other markets.
"London over the last 30 years has emerged as the world's primary servicing center for the over the counter swaps market," former Commodity Futures Trading Commission Chairman Christopher Giancarlo told OpenMarkets. "The process of Brexit looks to be disrupting to London as that center, and maybe even destructive to it as that center."
Among the issues in play is the nature of financial regulation that emerges with a split from the EU and whether the EU will require trading business to be conducted in the continent rather than out of London, as has traditionally been the case.
"All of that will play a huge role in how asset managers and market makers position themselves for the world after Brexit," said Sam Priyadarshi, Global Head of Portfolio Risk and Derivatives at Vanguard.
We spoke with Giancarlo and Priyadarshi at last year's Global Financial Leadership Conference, which begins next week in Naples, Florida. Watch their full remarks in the video above.
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