Brexit, the City of London, and the prospects for portfolio investment

This paper examines the international financial consequences of Brexit. It first provides a survey of the still limited literature on EU membership and international capital flows. It then provides new estimates of the impact of Brexit on cross-border investment utilising data from the IMF's Consolidated Portfolio Investment Survey. It lastly provides a comparative analysis of these same issues using data on cross-border capital flows from the BIS. The conclusion is that the impact on cross-border capital flows to and from the UK is likely to be substantial.