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More than 440 financial services firms in the UK have relocated part of their business to the EU as a response to Brexit,” according to “Brexit & The City: The Impact So Far,” a report published by the New Financial thinktank on 16 April 2021. About 25% of those firms went to Dublin and 21% came to Luxembourg. Pictured: The City of London, seen in May 2020. Photo credit: Alex Tai/Unsplash 

The figures are from a report published on Friday by New Financial, a London-based thinktank. “We think it is an underestimate: we are only at the end of the beginning of Brexit,” the study stated.

New Financial said 135 firms selected Dublin as a post-Brexit base, ahead of Paris (102 firms), Luxembourg (93), Frankfurt (62) and Amsterdam (48).

Dublin was the most popular location for asset managers, while Frankfurt led in banks, and Amsterdam was top choice for brokers and trading platforms.

“Banks have moved or are moving more than £900bn in assets from the UK to the EU”--which represents “roughly 10% of the UK banking system”--“and insurance firms and asset managers have transferred more than £100bn in assets and funds,” the thinktank wrote.

“In the longer-term, we expect Frankfurt to be the ‘winner’ in terms of assets, and Paris in terms of jobs.”

New Financial had tracked 269 firm relocations from the UK to the EU in a March 2019 report.

Two-way traffic

With Brexit, British financial firms have lost out on access to the single European market and EU rivals no longer have automatic cross-border access to the British market.

Many EU financial outfits have set up a new presence in the UK. But the number of firms is smaller than previously expected and they will create relatively few jobs in Britain, the thinktank reckoned.

Out of 1,448 EU financial firms temporarily registered to operate in the UK, only “around 300 to 500 mainly smaller firms” are expected to apply for permanent authorisation, New Financial forecast. That is “much lower than the prevailing forecasts of around 1,000.”