Despite the recent round of Brexit related worries, Britain may well be in a position to retain its standing as a major global financial hub. As cited by Bloomberg, Bank of England Deputy Governor Jon Cunliffe, in a speech he delivered in California last Friday, expressed his belief that the country's position in the world's financial industry does not depend solely on being part of the European single market.

He noted that less than 20 percent of assets managed in the City are domiciled in the rest of the European Union. From the total of around ten trillion pounds worth of assets of funds managed by UK registered companies, only around 10 percent are domiciled in the rest of the EU, well below the proportion managed by firms registered outside the union.

He then added that the hotly debated Brexit topic, the recent EU proposals on portfolio management delegation have a potential to fragment markets they affect. Contrary to the current global practice, these Brexit bound proposals appear to be driven by political desire to 'repatriate' financial activity and related risks within the bloc's jurisdictional boundaries.

CBI survey found financial services optimism dipped in Q4 2017

Reuters quoted the quarterly survey conducted by CBI and PwC. It confirmed declining optimism in the financial services sector. The sentiment fell for the third consecutive quarter from September to December, even though the overall volume of transactions remained stable during the same period. Survey respondents are vying for clarity on Britain's future role in trade relations.

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The EU is expected to approve, within a week, general criteria for negotiating a transition period. This milestone decision would kick-start Brexit in earnest in March 2019 and indicate the start of new trading terms for the UK.

A prolonged transition is likely

According to Andrew Kail, head of financial services at PwC, a prolonged transition period appears to be likely, yet he believes that Britain's financial industry must also be prepared to operate outside the union. CBI expects business transaction volumes to pick up in the next few months as the financial services sector ended last year on a stable footing.

Nevertheless, the whole picture may be mixed across various sectors. Meanwhile, Paris, Frankfurt, Dublin and Luxembourg are eyeing the current City's role as each of them is vying to attract the EU focused financial services they expect to abandon London once Brexit is complete.

On the other hand, the City of London Corporation confirmed in 2016 that almost 20 percent of all City employees were from a European country of origin, the highest percentage they ever recorded.