Why Europe cherishes the City of London How important to the EU economy are banking and finance in general, and the City of London in particular?
According to a report on behalf of the City, Europe’s wholesale financial services businesses was worth €195bn in 2006, accounting for close to a third of total global wholesale financial services output of €643bn, or 1.4% of global economic output. Between 2001 and 2006, the EU wholesale financial sector has been expanding at around 6% a year, roughly comparable to the rate of growth of the US sector and much quicker than the average 1.9% growth rate between 2001 and 2006 for the EU economy as a whole. Wholesale financial services are thus a substantial growth sector and now account for around 1.7% of the EU’s GDP. The EU has also become a dominant force in the global bond market – in 2006 around 32% by value of outstanding global bonds were held in Europe. In the equity markets, however, the US remains the leader in terms of market capitalisation, trading levels and the size of its equity markets compared with GDP. Just over half of the gross value added by the EU’s wholesale financi
