It has taken a few centuries, but Amsterdam last month usurped London as Europe’s top venue for share trading. Sweet for the city that hosted the world’s first stock exchange, deploying funds to finance wars and prevent flooding. Sour for the City of London. Its pre-eminence in financial services has taken a beating following the government’s failure to include financial services in its post-Brexit trade deal with the EU.

Britain in 2019 was able to boast an £18bn trade surplus in financial services with the EU. Last month, the first under Brexit, share trading volume slumped to a daily average of €8.6bn, according to data from Cboe Europe. Volumes on Euronext Amsterdam and the Dutch arms of Cboe Europe and Turquoise rose fourfold to a daily average of €9.2bn. In interest rate swaps, a market once dominated by the UK, its share has fallen from more than 70 per cent six months ago to just one-fifth.

These shifts have been triggered by the absence of “equivalence”, which would have allowed cross-border trading to continue unimpeded. Amid agitation on the part of frustrated regulators, there has been a late scramble by smaller, more localised brokerages to set up shop or move staff to European hubs.

Perspective is called for. Securities trading is a lean and mean business. Job losses in financial services so far, up to 7,000 according to the Bank of England, are smaller than anticipated. No wonder. Today’s business is automated and flows can be redirected easily. The whole trading desk does not have to move to somewhere like Amsterdam — where bankers would subject themselves to a 20 per cent cap on bonuses.

Still, the suspicion is growing that a City Golden Age triggered by Big Bang may now be ending. Liquidity begets liquidity. The more trading moves to new venues, the more will follow it. The precipitous slide in interest rate swaps from October onwards bears testament to that.

There is a further uncomfortable reality that affects Amsterdam, Paris and Frankfurt as much as London. Markets may be delocalising, thanks to the pandemic and automation, including algorithmic investment, free trading apps and index funds. The new Golden Age may belong to a new breed of investors and intermediaries rather than business hubs huddled round old-fashioned stock exchanges.

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