Open Europe said the success of the capital”s banking sector was NOT dependent on access to the much vaunted EU single market.
In their report How the UK’s Financial Services Sector Can Continue Thriving After Brexit, they said: “The assertion that the success of the City of London is based on full and complete access to the EU single market in financial services is not borne out by our analysis.”
The authors, acting director and director of policy research Stephen Booth and senior policy analyst Vincenzo Scarpetta, said the British government would have to negotiate “effective alternative arrangements with the EU” to ensure this.
The report states: “Europe benefits hugely from having the premier global financial centre within its borders.”
Banking, the country’s most significant financial service, is estimated to bring in between £23billion and £27bn a year according to consultancy firm Oliver Wyman.
It is deemed in the report to be “a two-way street” with a number of European banks making a significant proportion of their income from London.
However the report shows that of the big four high street banks, they all generate less that 10 per cent of the global revenue in the rest of Europe.
Should the UK be denied access to the European single market, banks like Deutsche Bank that gain 19 per cent of their income from London would be adversely affected.
The report also indicates that no mainland financial hub was in a position to steal London’s financial crown as the world’s number one financial centre.
In a recent survey in September London was ranked first whilst the closest European rival, Luxembourg, was 12th with Frankfurt coming in at a lowly 19th.
The positive outlook for Britain outside of the single market comes amid a fall in the pound sparked by fears of the impact of a “hard Brexit”.
However, former governor of the Bank of England Mervyn King said recently that he thought the fall in the value of the pound was a “welcome change” for the UK”s economy.
Speaking to Sky News, Lord King said: “The economy was slowing somewhat before the vote and we are in a position where the rest of the world is not offering us much help. So from that point of view the fall in sterling is a welcome change.”
The report comes after the chief executive of beleaguered Deutsche Bank John Cryan said that London would remain Europe’s top financial centre over the next decade.
He said: “It is important for the bank to respect the fact that we really need to follow our customers. In some areas London is our biggest trading hub.
“We trade a lot of paper and derivatives which are eurozone or EU paper, and although we are passported into the UK and the UK authorities are very keen for us to continue to passport in, our clients might take us back into the EU because they may demand we transact with them through an EU entity.”
Mr Bryan had previously said that he thought the City of London’s dominance would be put at risk due to the Brexit vote with most of the EU’s bond trading leaving the financial hub.