Who’s Really Most Afraid of Brexit? And Why?

Follow the money.

One of the glaring but oft-overlooked ironies of the Brexit debate is the fact that the UK has been one of the biggest beneficiaries of the creation of the euro, despite not being a member of the Eurozone and holding the single currency in rampant disregard. The UK economy has certainly benefited more than most Eurozone economies.

Since 2001 Britain’s share of key financial markets has exploded. London is now home to almost one-half of the entire global interest-rate OTC derivatives market, compared to 35% in 2001. Its share of global forex turnover increased from 33% to 41% between 2001 and 2014. And its share of global hedge fund assets doubled, from 9% to 18%.

Almost 2.2 million people work in financial and related services such as accounting and law, two-thirds of them outside London, reports a study by the financial services lobby group CityUK. They produce nearly 12% of the UK’s GDP, 11% of its tax take, and a net trade surplus of £72 billion ($104 billion).

Financial services have taken a third of foreign direct investment in Britain since 2007, most of it coming from the EU. These are some of the reasons whyThe Economist magazine recently identified the City of London as the place with arguably most at stake in the Brexit debate, especially with its two biggest rivals, Paris and Frankfurt, vying to take a piece of the action

Continue reading the article at WOLF STREET

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