Post-Brexit Leadership in European Finance
By Sven Van Kerckhoven
Brexit has far-reaching consequences for Europe and the European single market for financial transactions. In particular in this field, the UK has had a strong influence in drafting European policies and legislation as the City of London has acted as the financial hub in Europe for several decades. As a result, the UK has spearheaded the call for more market friendly legislation with the support of some other EU member states. This went against the wishes of several other EU member states, where a stronger rule-based approach to financial markets was strongly preferred, in particular after the financial crisis clearly demonstrated weaknesses in the macroeconomic oversight of European financial markets. With the UK leaving, the call for more stringent legislation will gain momentum as the political leadership among the remaining 27 EU member states will shift and might be looking to curtail the long-standing dominant position of the UK in the field of financial industries. In this light, several leaders of EU27 member states have already voiced their support for their nations’ financial hub to become the next City of London. This would lead to a substantial change in leadership in European finance post-Brexit. This contribution assesses the impact of Brexit on the changes in political leadership on the governance of European financial markets, as they might ultimately be reflected in the institutional outcomes and policies.