Can London stay as one of the global trading centres

London has been one of the global trading centres for centuries and had been the top one on the list. However, since the rise of the US, Japan, China and some other economies, London's importance and dominance have been diminishing. Even worse, after the Brexit referendum, though Britain has not officially left the European Union yet, the companies and individuals are preparing themselves for Britain leaving the EU, as we can see the price fluctuations in the British markets., including the London real estate market. There are some more serious moves taking place in the British financial sector. London's position as the global foreign exchange trading centre has been hit by the fall in the UK's capital share in the business, while Tokyo, Singapore and Hong Kong have taken much of the London's loss and increased their combined share to 21 per cent from 15 per cent. More than foreign exchange trading, many investors would also expect the volumes in commodity trading and security trading will diminish after the Brexit, which we still need to wait for some official reports to prove the argument but I think is very likely to happen.

Once Britain leaves the European Union, in terms of the financial industry in Europe, some institutions may decide to stay in Britain, as Britain holds the majority of their assets and moving their assets across countries has very high costs. Some institutions have already spoken that they would move their European head offices to the countries like France and Germany, these institutions are multinational operations and have more activities in the rest of Europe than in the UK.

Despite these facts, I think London can still remain one of the global trading centre, as London has its own advantage in terms of being a global trading centre. Firstly, London has been the global trading centre for centuries, it has all the facilities a global trading centre needs and many young graduates have already been trained to be capable to work in the industry, which reduces the cost of training. Secondly, the language used in Britain, English, has been widely spoken. Thirdly, the culture of London is very open to foreigners. The British population did vote to leave the European Union, but the majority of the Londoners voted to stay in the European Union. Fourthly, we are still uncertain about the new trade deal between Britain and the European Union, we could be more optimistic. Fifthly, Britain has established some close relationship with the US, China and many other countries, including the Commonwealth countries. Such foreign policy could benefit the financial industry, as the cost of transaction could be lower than other areas.

To conclude, I expect the financial activities in London would decrease after Britain officially leaves the European Union, but London could still remain as one of the most important global trading centres at least for the rest of this century.