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Making the Best of Brexit for the EU27 Financial System
Report

Making the Best of Brexit for the EU27 Financial System

Bruegel, 2017

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Editorial Rating

8

Qualities

  • Analytical
  • Innovative
  • Overview

Recommendation

The United Kingdom’s departure from the European Union will leave the remaining 27 member states to reckon with the disruptions certain to roil the region’s financial industry. According to this instructive overview from economists André Sapir, Dirk Schoenmaker and Nicolas Véron, the loss of London as the EU’s financial center could strike a blow to market efficiency, transparency and stability, given the City’s central role in financial markets both within and beyond the EU. getAbstract recommends this big-picture analysis to policy makers and economists for its view of the financial industry issues confronting the EU in a post-Brexit world.

Take-Aways

  • Once Brexit occurs in early 2019, the European Union’s financial system will face significant transitional challenges.
  • Financial market fragmentation would likely make Amsterdam, Dublin, Frankfurt and Paris centers of activity, handling an estimated combined 85% of financial transactions, with the remaining15% scattered around other EU members.
  • Market fragmentation in the wake of Brexit also will lead to higher borrowing costs for businesses and consumers.

About the Authors

André Sapir, Dirk Schoenmaker and Nicolas Véron are senior fellows at Bruegel.