London has acted as one of the world’s preeminent financial hubs and allowed banks a kind of “passporting” right which let firms reside in the U.K. and sell their products and services throughout the E.U.
“The city is not going to lose the financial leadership of Europe, it’s too far ahead, but a lot of that lead is going to get eroded,” Ewen Cameron-Watt, chief investment strategist at BlackRock Inc, told Bloomberg. “They’re going to go to Dublin or Frankfurt or Paris.”
For instance, Morgan Stanley President Colm Kelleher said earlier that leaving the E.U. would cause the bank to move its local headquarters to Dublin or Frankfurt and to relocate 1,000 employees, or one-sixth its U.K. workforce. Morgan Stanley (NYSE: MS) shares plunged 9.6% Friday.
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Financial Select Sector SPDR