ESMA Charts Illustrate the Brexit Concentration Risk for Europe
This chart shows without question what a disaster it would be if a legal or regulatory barrier is erected down the English Channel (French: la Manche, "The Sleeve"; German: Ärmelkanal, "Sleeve Channel"; Breton: Mor Breizh, "Sea of Brittany"; Cornish: Mor Bretannek, "British Sea"; Dutch: Het Kanaal, "The Channel"). Whilst Paris and Frankfurt have some significance to volumes in the derivatives markets and have exchanges and CCPs which could process the same products as in the UK, the idea that the majority of trading could jump the channel on March 30th next year is near impossible. Whatever the outcome of Brexit, disrupting the markets should be avoided at all costs, otherwise everyone including politicians on both sides of la Manche will experience financial damage. For more charts, view the latest report from ESMA on the size and state of the OTC and ETD markets here.
What the charts don't show is business originating outside the EU – if the US, Japan and other large countries were added, the picture would be even more skewed I believe.