Financial Stability Note: Central Bank note outlines the landscape for London and other EU financial centres post Brexit

06 August 2019 Press Release


  • London likely to remain a very large global financial centre (GFC) even in adverse Brexit scenarios.
  • Impact of Brexit on London’s GFC could be very small due to the ‘premium’ London enjoys.
  • A less open, productive, and rich UK might influence London’s GFC and other financial centres in the EU, including Dublin.

The Central Bank has published a Financial Stability Note by Silvia Calò and Valerie Herzberg which examines the future of Global Financial Centres (GFC) after Brexit, from an EU perspective. The research presents a set of scenarios for the future of London and other financial centres in Europe after Brexit and finds the impact of fundamental factors on London could be very small. The potential dispersal of financial services to smaller centres like Dublin could have an impact on those centres.

One of the scenarios suggests that London will remain one of the major global centres irrespective of shock impacts. This takes into consideration data for the size of the country and city, trade openness, economic development, host city innovation, dominant currencies and legacy effects. However London’s status might be vulnerable to changes effected by new trading arrangements, disruption in global value chains, and institutional reshaping and associated uncertainty.

Finally, the analysis suggests that even if the City of London remains robust to adverse conditions, the impact of relocations on smaller centres like Dublin, Amsterdam or Luxembourg could be quite material.

The rapidly growing and changing nature of the Dublin financial centre, coupled with the visible fragmentation of finance in Europe raises questions about the evolution of financial stability risks. The Note concludes that the Central Bank of Ireland has already addressed some of these risks - for instance through a thorough authorisations process and by focusing resources on identifying and mitigating risks.

Library of Financial Stability Notes