(Reuters) – Over 400 financial companies in the UK have relocated activities, staff and a total of 1 trillion euros ($ 1.4 trillion) in assets to hubs in the European Union due to Brexit, with more pain ahead, according to a study from the new financial think tank.
"We think this is an underestimation and we expect the numbers to increase over time: we are only at the end of the beginning of Brexit," the study said.
The EU has offered Britain a bit in the way of direct market access for financial services, which was not included in the bloc's trade agreement with the United Kingdom from January.
"It is unlikely that supply will exist, so it may be better for industry to take the damage from Brexit on its chin and instead focus on recalibrating the UK framework to be more tailored to the unique nature of the UK financial industry, says the study.
About 7,400 jobs have been moved from the UK or created on new hubs in the EU, the study said. Bankers have told Reuters that some staff transfers have been delayed due to COVID-1
A total of 440 relocations are higher than expected and well over 269 in New Financial's survey for 2019. New Financial estimates that the actual number is well over 500.
Dublin has become the largest recipient with 135 relocations, followed by Paris with 102, Luxembourg 95, Frankfurt 63 and Amsterdam 48.
"This redistribution of operations across the EU has hurt the clock back by about 20 years," says the study.
Banks have transferred or are moving over € 900 billion in assets from the UK to the EU, while insurance companies and asset managers have transferred over € 100 billion in assets and funds, reducing the UK tax base.
"We expect Frankfurt to be the 'winner' in terms of assets in the long run, and that Paris will eventually become
Amsterdam overthrew London as Europe's largest stock trading center since January has been the most visible sign of Brexit in finance.
The study expects 300 to 500 smaller EU finance companies to open a permanent office in the UK, far fewer than the current forecasts of around 1000.
The City of London will remain the dominant financial center in Europe for the foreseeable future , but its influence will disappear and risk a reduction of the UK's 26 billion euros. annual trade surplus financial services with the EU, the study added.