If we leave the EU in isolation, we could soon be run by America, with its huge financial clout, and by China, which very much hopes to become a major world player. If we quit the European Union, we would damage one of our most important industries – financial services. The extent of the wound would depend on how we exited. Although bankers are not popular, much is at stake. Financial services are responsible for nearly 10% of our economy and 11% of tax revenue. Various associated professions such as law and accountancy are also important.
The City – used as a shorthand for financial services across Britain – is not just the UK’s financial capital. It is also Europe’s top financial centre, accounting for 78% of the EU’s foreign- exchange trading, 85% of Europe’s hedge fund assets and half of its fund management.
The way to quit the EU and inflict the least harm on the City would be to stay in the single market – in other words, the Norwegian approach. The snag is that the rules for how the City would be regulated would be determined in Brussels and we wouldn’t get a vote on them. Other countries might even try to rig the rules to shift business from London to Frankfurt or Paris. This is worse than the status quo. Although the UK cannot currently veto EU financial services legislation, in practice it has only twice lost out. The main one was when Brussels decided in 2013 to cap bankers’ bonuses. More often, we are able to negotiate a good deal for the City.
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If we leave the EU in isolation, we could soon be run by America, with its huge financial clout, and by China, which very much hopes to become a major world player. If we quit the European Union, we would damage one of our most important industries – financial services. The extent of the wound would depend on how we exited. Although bankers are not popular, much is at stake. Financial services are responsible for nearly 10% of our economy and 11% of tax revenue. Various associated professions such as law and accountancy are also important.
The City – used as a shorthand for financial services across Britain – is not just the UK’s financial capital. It is also Europe’s top financial centre, accounting for 78% of the EU’s foreign- exchange trading, 85% of Europe’s hedge fund assets and half of its fund management.
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