LONDON–The City of London must remain the top global financial center after Brexit to avoid its financial services drifting to other parts of the world, Luxembourg Finance Minister Pierre Gramegna said on Monday.
Financial centers such as Luxembourg, Paris and Frankfurt are battling each other to attract banks, insurers and asset managers in Britain who need an EU base after the UK departs the bloc in 2019.
Companies from across the EU use London for currency trading, derivatives and managing investment funds. Some EU policymakers want parts of these activities shifted to the continent after Brexit to avoid relying on what will then be a foreign financial center.
“It’s key for Europe ... that the Number 1 financial center in the world remains in Europe,” Gramegna told students at the London School of Economics.
There was a need to harness the City of London to Europe to ensure that London continued to perform well, Gramegna said.
Punishing London to get a “chunk” of the pie was a very short-term view, and a “no deal” Brexit would not benefit the EU, but send UK financial services to countries outside Europe, Gramegna said.
