February 2022

Despite being over 1,400 pages long, the agreement of December 24, 2020, which sets out the terms of the post-Brexit relationship between the European Union and the United Kingdom, says little about a key sector of the British economy: finance. Indeed, financial services were not at the heart of the negotiators' mandate.

The Brexit was a major upheaval for the financing of the European economy. London is and will remain a major financial center, but the European Union can no longer rely on London for its market financing.

The Brexit was a major upheaval for the financing of the European economy. London is and will remain a major financial center, but the European Union can no longer rely on London for its market financing. This is a strategic issue: the European Union must ensure its financial independence. At the same time an imperative and a major political project that Europe had to take on, particularly at the level of the euro zone, the Brexit had a profound impact on the European banking sector.

The Brexit, which did not come from the will of the EU, forced this latter to relaunch the Capital Markets Union at a rapid pace.  Economic actors, including banks, had to adapt and prepare for all scenarios, at the request and under the control of banking regulators. Major transformations have taken place within a tight timeframe.

While this has been a real opportunity for the continental financial industry and more particularly the French one (well placed with 4 of the 9 largest banks in the Eurozone), to be the champion of this new era, the management of the Brexit and the European banking landscape has strongly changed and revealed challenges, some of which had not been anticipated.

The purpose of our publication is, after a brief reminder of the context and the stakes of the Brexit, to draw up a review of its impact on British and European banks and to highlight the changes that are still to come over in the coming years.

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