Thread by @Williamw1

There's lot of excitement, anger and surprise at the news that Amsterdam has overtaken London as the biggest centre for equities trading in Europe. Here’s a little bit of perspective: 1/

https://twitter.com/Williamw1/status/1359795558613934086

This shift is one of the very areas where Brexit has a binary / mechanical impact: inside the EU, trading in EU shares could take place in London; outside the EU with no equivalence for stock exchanges, it can’t. So it had to move and has moved. 2/

In most areas of the City, the impact of Brexit is nothing like as binary and the relocation of activity will be much more marginal. 3/

The numbers look big but the economic impact (at least for now) is limited. Back of the envelope estimate: €6.5bn in daily trading volumes in EU equity trading switching from London translates into maybe £50m in annual revenues, max £5m in lost tax. Probably less. 4/

The location of where the trading is conducted has moved. Aside from a few dozen jobs at the exchanges themselves, the traders haven’t moved, the hedge funds and asset managers giving them orders haven’t moved. 5/

If these exchanges had moved their servers to Macclesfield a few years ago, I’m not sure we would have been getting excited about Cheshire’s future as a global financial centre. 6/

That said, Amsterdam has been the main beneficiary in trading and broking when it comes to Brexit-related relocations: at @NewFinancialLLP we’ve counted nearly 50 firms that have moved something to Amsterdam, and most of them are exchanges, trading firms, brokers and fintech. 7/

@NewFinancialLLP But before we start getting too excited about Amsterdam overtaking London as a financial centre, here’s a summary of the daily trading volumes in derivatives and foreign exchange (with equities at the bottom for context). 8/

Volumes in London are roughly 75 times larger, and roughly five times as big the whole of the EU combined. 9/

The City cannot afford to be complacent: we have long argued that Brexit will have a ‘drip feed’ impact on the City on jobs, activity and tax receipts. But anyone expecting the shift we have seen in equities to happen elsewhere is going to be disappointed. / ENDS