Brexit and European Financial System

London is Europe’s financial centre, providing corporate and investment banking services to the European Union’s 28 member countries and beyond. When the United Kingdom leaves the EU and its single market by the spring of 2019, UK-based financial firms will lose their passport to do direct business with EU27 clients. Brexit thus leads to a partial migration of financial firms from London to the EU27 (EU minus the UK) so that they could continue to serve their customers there.We provide a comparison between london and four major cities that together will host most of the new EU27 wholesale market: Frankfurt, Paris, Dublin and Amsterdam.We also give a detailed picture of the wholesale markets(foreign exchange, securities and derivatives trading), the largest players in these markets (the major banks) and the underlying clearing infrastructure.London is an international financial centre, serving European and global clients. A hard brexit would lead to a partial migration of financial firms from London to the EU27(EU minus UK) to ensure they can continue to serve their EU27 clients.four major cities will host most of the new EU27 wholesale markets: Frankfurt, Paris, Dublin and Amsterdam. These cities have far fewer people employed in finance than london. Moreover, they host the European headquarters of fewer large companies. The partial migration of financial firms will thus have a major impact on these cities and their infrastructures.Banks are the key players in wholesale markets. United states and swiss investment banks, together with one large German and three large French banks, will make up the core of the new EU27 wholesale markets. some Dutch, italian and Spanish banks are in the second tier.