Cher M. Barnier - that's not for you to decide Matey

Michel Barnier, the European Union’s chief negotiator on matters Brexit, has declared that Britain should not remain the wholesale financial market for Europe after that Brexit:

London should lose its status as a European centre for financial and legal services after Brexit, Michel Barnier has said.

This is a fundamental misunderstanding of why markets exist, who determines that they do and the role of politicians in where they are.

As you can see the statement is that an unelected bureaucrat should decide where people transact. Or, to give a slightly less objectionable reading, that those doing the ruling should decide upon who may transact where. Which isn’t in fact how these things do work.

Markets arise where the people doing the transacting desire them to be. The reason the wholesale financial markets are in London is some mixture of historical happenstance, clustering, the use of the Common Law as the basis of commercial practice, language and however many other things you want to point at. Rulers shouting that it shouldn’t be so won’t have much effect on that.

We’ve also tried this twice now - there have been two great episodes of economic globalisation, up to 1914 and up to today. In both Germany seemed to end up doing the heavy industry and London the financing. Two out of two isn’t a proof but it is indicative of it being more than just happenstance alone.

The important thing here being that where a financial - just as with any other - market is isn’t in fact something that’s decided by anyone, bureaucrat, politician or ruler. It’s something emergent from the decisions of millions and tens of million of people all doing their own thing. Demanding this and that doesn’t work, isn’t a decision for any individual to take.