Blog: Is Amsterdam luring all the post-Brexit business? – Yahoo News

Is Amsterdam luring all the post-Brexit business?

Amsterdam has displaced London as Europe’s biggest share trading centre after Britain left the European Union’s single market.

That’s according to data released by the Cboe exchange, which operates in both cities.

Take a look at January 2021.

Stock exchanges in the Dutch capital traded $11.15 billion a day, compared to London’s $10.4 billion.

And the EU’s securities watchdog ESMA said the shift of share trading from London to the European bloc is permanent.

So how come all the shares, swaps and SPACS are heading for the Dutch capital….rather than Paris or Frankfurt?

Reuters capital markets correspondent, Abhinav Ramnarayan

Location: London

”Experts suggest that the reasons for this are, well, first of all, the soft factors. English is spoken widely in Amsterdam. A lot of the documentation can be done in Amsterdam. And also, I mean, there are all sorts of cultural factors. Amsterdam was a trading powerhouse back in the day, and maybe they have the right sort of culture for this for this kind of thing. And finally, you have corporate governance standards in Amsterdam, which are generally considered quite flexible. So it’s quite easy for a company to list in Amsterdam and meet the requirements of the regulators can in the Netherlands. We’ve already had one major international IPO in Amsterdam. And the pipeline suggests that there are going to be several more that are going to Amsterdam, whereas in the past they may have come to London.’’

While it certainly looks promising for the Dutch capital – home to the world’s oldest stock exchange – not all businesses are sold on going Dutch.

Many investment banks with their large staffs have looked elsewhere on the continent -deterred in part by Dutch laws that limit banker bonuses.

Some senior bankers also don’t believe the recent shift in share and derivatives trading threatens London.

And there hasn’t exactly been a post-Brexit jobs boom in the Netherlands either.

”Only 1,000 new jobs have been created in Amsterdam since Brexit. And that’s 1,000 new jobs, that is. And I mean, that may sound like a lot, but when you look at sort of half a million people who are employed in financial services in London, it’s quite a small fraction of the total number of jobs that could move there. I think we will have to see how it plays out over several years. And we also can’t write London off just yet. We don’t know in the long term what the terms of the agreement are. We know what the terms are now between UK and EU, but that could change. And London could actually claw back some business and it could sort of remain a financial hub in Europe.”

Some financial experts say it’s too far soon to draw any conclusions, partly because the early data on the impact of Brexit is mainly trading-based, which, given that Brexit has so far hit trading the hardest, may have flattered Amsterdam’s success.

Video Transcript

Amsterdam has displaced London as Europe’s biggest share trading center after Britain left the European Union single market.

BORIS JOHNSON: Have I read it? The answer is yes.

That’s according to data released by the Cboe Exchange, which operates in both cities.

Take a look at January 2021. Stock exchanges in the Dutch capital traded $11.15 billion a day, compared to London’s $10.4 billion. And the EU securities watchdog ESMA said the shift of share trading from London to the European bloc is permanent. So, how come all the shares, swaps, and SPACs are heading for the Dutch capital, rather than Paris or Frankfurt? Reuters capital markets correspondent Abhinav Ramnarayan.

ABHINAV RAMNARAYAN: Well first of all, the soft factors. English is spoken widely in Amsterdam. A lot of the documentation can be done in Amsterdam. And there are also sort of cultural factors. Amsterdam was a trading powerhouse back in the day, and maybe they have the right sort of culture for this kind of thing. And finally, you have corporate governance standards in Amsterdam, which are generally considered quite flexible. So it’s quite easy for a company to list in Amsterdam and meet the requirements of the regulators in the Netherlands. We’ve already had one major international IPO in Amsterdam, and the pipeline suggests that there are going to be several more that are going to Amsterdam, whereas in the past they may have come to London.

Well it certainly looks promising for the Dutch capital, home to the world’s oldest stock exchange. Not all businesses are sold on going Dutch. Many investment banks with their large staffs have looked elsewhere on the continent, deterred in part by Dutch laws that limit banker bonuses. Some senior bankers also don’t believe the recent shift in share and derivatives trading threatens London. And there hasn’t exactly been a post-Brexit jobs boom in the Netherlands either.

ABHINAV RAMNARAYAN: Only 1,000 new jobs have been created in Amsterdam since Brexit. And that may sound like a lot, but when you look at sort of half a million people who are employed in financial services in London, it’s quite a small fraction of the total number of jobs that could move there. We will have to see how it plays out over several years. And we also can’t write London off just yet. We don’t know in the long term what the terms of the agreement are. We know what the terms are now between the UK and EU. But that could change and London could actually claw back some business, and it could sort of remain a financial hub in Europe.

Some financial experts say it’s far too soon to draw any conclusions, partly because the early data on the impact of Brexit is mainly trading based. Which, given that Brexit has so far hit trading the hardest, may have flattered Amsterdam success.

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