Why do foreign banks stay in London
In recent light of the Independent Banking Commission’s new report on reforming the banking sector, there is a new worry that some of the world’s largest investment banks will leave London for countries that offer better incentives and benefits. However, a Cass research team has found that financial institutions may find there are different benefits to continuing operations in London.
This research paper examines the factors that drive the continuation of banking activities in the UK, and examines evidence from 408 offices looking at factors that determine where or not banks uproot or continue to operate in London for the time period of 1945-1999. London is arguably the world's most international banking centre, and there are benefits to operating in close geographical proximity with competitors, as this paper argues.