Rebooting UK capital markets post Brexit

Analysis of the shift in risk appetite & investment away from equities over the past few decades by UK pension funds.

The government has appointed Sir Douglas Flint, Chairman at abrdn to chair the Digitisation Taskforce which will look at ways to drive forward the modernisation of the UK’s shareholding framework. Considering the scale of market coordination and the varied expertise required to ensure digitisation delivers equitable outcomes, Sir Douglas Flint is leading a group of […]

Depending on your perspective, the Edinburgh Reforms are either ‘a bold collection of reforms’ (Jeremy Hunt); ‘a missed opportunity’ that is ‘too slow, too narrow, and too timid’ (The Daily Telegraph); a risky ‘bonfire of burdens on the City’ (Robert Peston); or ‘an extremely dangerous and wrong path to follow’ (Sir John Vickers). We think the reality is more prosaic.

This report outlines an ambitious blueprint for the future of UK banking and finance in three broad areas: rebooting domestic capital markets to enable the industry to better support the UK economy; improving the international competitiveness of the UK as an international financial centre; and mapping the potential role the UK could play in developing global cooperation and partnerships.

This report highlights the damage that Brexit has already done to the City of London. More than 440 firms in banking and finance have moved or are moving part of their business, staff, assets or legal entities from the UK to the EU. While this is higher than previous estimates, it underestimates the real picture – and the potential longer term impact.

This report shows that while the UK is bursting with over £5.6 trillion in pools of long-term capital it faces a drought of the sort of long-term productive investment that the economy needs in the wake of the Covid crisis. Just 1% of pensions and insurance assets are invested in unlisted UK equities: this report highlights the barriers to unlocking more of this capital and suggests some solutions to put more of it to work in the UK economy.

In the past few weeks, it has been quite surprising to see how many people appear to be surprised that the UK’s financial services industry / the City ended up with so little from the Brexit deal, or that there would be an immediate impact on some parts of the industry. This short paper summarises […]

This report analyses the shifting trends in European and global markets and identifies the big strategic choices the UK will need to make in the coming years on the future of banking and finance, capital markets, and the City of London.

This report shows that capital markets have a vital role to play in supporting the UK economy through the Covid crisis and driving a recovery.  The report identifies 1,000 large UK companies that use the capital markets to support their day-to-day business, raise capital, or manage their risks. These companies employ nearly six million people in the UK and represent nearly 90% of UK firms with revenues of more than £200m.

This updated report provides the most comprehensive analysis yet of the impact of Brexit on the City and the wider banking and finance industry. More than 330 firms in banking and finance have moved or are moving business, staff, assets or legal entities away from the UK to the EU – and these numbers are likely to increase in the near future.

This report shows that post-Brexit capital markets in the EU will be significantly smaller and less developed relative to GDP than they are today. The UK’s current dominance of EU capital markets activity will be replaced by the dominance of France and Germany.