New Brexit study: EU loses ground on the capital market
The capital markets in Europe will significantly shrink after the Brexit – and will be even more dependent on lending by the crisis-ridden banking sector. This is the result of a recent study by the research institute New Financial.
With Britain, the European Union is losing its deepest capital market and a high level of supervisory and regulatory competence, which has developed there over many decades. The United Kingdom currently accounts for almost one third (31%) of all capital market activity in the EU.
The authors of the study assume that France and Germany will emerge as the new leaders in the EU financial sector after the Brexit. After the UK withdrawal, France is the largest capital market in the EU with a share of almost a quarter of total activity, ahead of Germany with 19%.
In an international perspective, Brexit would also have negative consequences for the EU: The experts from New Financial conclude that Europe’s share of the entire capital market will be reduced to 14 % by Brexit. The EU would then be on a par with China. At present, Europe is still the second largest capital market in the world after the USA with a share of around 20 %.