Brexit and Alternative Financial Centres: The Consequences for the City of London

For years, membership of the European Union meant stability and growth for the United Kingdom and its main financial centre. Britain has, nonetheless, voted to leave the bloc and its International Financial Centre (IFC) has started feeling the consequences of this decision. Cities like Frankfurt and Paris, big European Alternative Financial Centres (AFCs) see Brexit as an opportunity in a lifetime. Lobbying from both AFCs has never been so intense as they try to mitigate the consequences of Brexit and, at the same time, to increase their comparative advantage vis-à-vis each other in what can be called the "Brexit race". In this sense, this thesis aims to analyse "Why and how do public and private actors present in Paris and Frankfurt try to attract the City’s financial industry in the context of Brexit". To answer this question, this work is divided into three main chapters. The first discusses on the historical background of London's rise, the impact of Brexit to the financial sector in the UK and the EU as well as the stakes at play. The second focuses on the theoretical overview of the topic. It draws on Liberal Intergovernmentalism and Disintegration to explain how Brexit dynamics influence preference formation on finance-related issues and how fragmentation in European financial markets plays a role. In addition, it conceptualises Economic patriotism, financial geography as well as structural and instrumental power of finance to explain how actors are likely to behave in each AFC. Finally, an empirical analysis is proposed through the discussion of the different strategies applied by economic and political actors present in both AFCs. The results presented prove the main hypothesis of this thesis by highlighting the important role of the political economy in each AFC when it comes to the determination of the way actors behave and the type of business relocating from London to the analysed financial centres.