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The economic geographies of Brexit and financial services
This paper analyses the implications of Brexit for financial geographies in the EU. Popular and media attention has focused on the relocation of some jobs and assets from London to European financial centres. These reports argue that such relocations are a response to the additional regulatory requirements and costs of accessing the EU’s single market in financial services from London from 1 January 2021 but leave activities within financial institutions relatively black boxed. I argue that greater attention needs to be paid to how Brexit not only triggers the relocation of existing corporate activities but is also reshaping corporate geographies themselves as financial institutions respond to the additional trade friction in services between the UK and the EU. Focusing on two elements of London’s financial services ecosystem, banking and asset management, I examine how the relatively limited relocation of activities to the EU is partly explained by the ways in which firms are responding by adjusting their business models to reflect London’s new position outside of the EU. In so doing, I develop a sympathetic critique of work in financial geography on financial firms, arguing that more attention needs to be paid to how the organisation of financial institutions is shaped in important ways by regulatory boundaries. Whilst I develop this framework in the context of Brexit, we suggest that it is applicable to wider work in economic and financial geography.
Sarah Hall is a Professor of Economic Geography at the University of Nottingham. Supported by funding from the ESRC, the British Academy, The Leverhulme Trust and the Nuffield Foundation, her research centres on financial services in the UK, London’s international financial district and its relations with Europe, China and North America. Her research has been covered my leading media outlets including The Financial Times, the BBC, The New York Times, The Daily Telegraph and Wired magazine. She is the author of Global Finance (Sage 2017) and Respatialising Finance (Blackwell 2021). She was appointed an Editor of Geoforum in 2013 and held a British Academy Mid Career Fellowship (2015-2017). She is currently a Senior ESRC Fellow with The UK in a Changing Europe where her work focuses on Brexit and the UK’s financial services sector. She was elected a fellow of The Academy of Social Sciences in 2020.
Sarah Hall, Professor of Economic Geography, the University of Nottingham
