Did Boris give up finance for fishery?

Brexit has resulted in big financial players shifting their trades of European stocks out of London.

This is one of the clearest indications of the repercussions of Brexit and the economic fallout between the UK-EU economies. On Monday, a vast majority of EU dealing volumes moved to venues in Paris, Amsterdam, and other financial centers. 

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Before Brexit kicked in, EU banks and investors could bypass their country’s home exchanges and trade in London. As of 1 January, this option ended. The block pursued greater control over how EU stocks got traded during the negotiations. Europe intended to even the playing field in the financial sector in an effort to challenge London- the region’s dominant financial center. 

Capital shift

WSJ reports that 90% of EU Europe’s largest cross-border share trading platform Cboe, has moved to Amsterdam. As for Aquis, 100% of all European trading stocks were moved to their Paris operations. It is roughly estimated that Brexit triggered a capital outflow worth £1.2 trillion worth in assets to mainland Europe, a move that forced exchange operators, banks, and other financial investors to relocate hundreds of employees while expanding or setting up new operations in Frankfurt and, Paris. 

Trading of non-EU shares still remains in London though. These stats have promoted critics of the ‘leave’ movement to question the cost-benefit aspect of the recent Brexit negotiations. 

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The Brexit deal agreed to last month, sets rules for the fishing and agricultural industries, but hardly safeguards the finance sector. This meant automatic access to the EU’s financial market ended on Dec 31 fueling the switch from London to the EU. 

Fish over finance?

The players in the fishery industry are not too keen either on the new concessions agreed to by the British PM. British PM agreed to cede ground on EU access to fishing waters as the country exited the EU Common Fisheries Policy.

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As part of the new trade agreement between the UK and Brussels, 25% of EU fishing rights in UK waters would be transferred back to the UK over the next five and a half years. Originally, the UK had demanded a 60-80% cut.

Moving forward the two sides will negotiate future fishing rights. Fishing makes a tiny fraction of the UK economy - employs 24,000 people and generates £1.4 billion (0.08% of GDP) for the country’s economy according to research by the House of Commons research library. In comparison, the financial services industry is worth £126 billion.