London to win battle against Amsterdam, says Professor Bryson
The EU is slow in decision-making and negotiations. The delays over the COVID-19 vaccination program prove the lack of agility.
John R. Bryson, Professor of Enterprise and Economic Geography at the University of Birmingham, has stated that London is unlikely to be ousted as the global financial center in the Brexit aftermath.
Mr. Bryson said that Amsterdam’s emergence as the primary center for European share trading suggests that the European Union will never develop a global financial center that displaces London for four reasons.
“First, the European Commission (EC), and the member states, would have to agree to focus all financial service activities in a single center. A decision would have to be made to position Amsterdam, Frankfurt, Paris, Milan, or Dublin as the emergent European Global Financial Centre. The politics within the EU would never enable such a decision to be made. Europe will continue to have several smaller competing financial centers”, said Mr. Bryson.
For the second reason, the Professor points to the major governance problem in the European Union. As a confederation, the EU does not have the flexibility of a country in matters in which there is a division of power between member states and the European Commission (EC). The EU is slow in decision-making and negotiations. The delays over the COVID-19 vaccination program prove the lack of agility.
In the Global Financial Centres (GFC) September 2020 index, London was ranked second to New York, with Amsterdam coming at at 22, Dubai at 17, and Singapore at 6. This is the third reason: “London needs to think and act globally rather than locally to maintain its position as one of the leading global financial centers. London has three advantages that are not held by any other European centre – existing scale and networks, a supportive legal system and ‘speedboat’ agility”.
The fourth and last reason for London’s top position as the financial center instead of Amsterdam is the UK legal system, which is based on common law. The EU and its member states are based on civil law, where codes, regulations, and laws can be applied to any conceivable circumstances. Common law develops as the socio-economy develops, which encourages innovation.
In conclusion, Mr. Bryson’s take is that the UK’s agile decision-making is a threat to the EU’s ‘tanker-like’ speed as the financial industry positions itself in the post-pandemic.