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Business

Mixed signals for London, Frankfurt stock exchanges

Would a British exit from the EU be good or bad for Frankfurt as a financial center? And what about its merger partner, the London stock exchange? Two surveys come to different conclusions.

Financial pundits in Germany and the UK have been speculating for weeks about the future of the two financial hubs after their planned merger - and, of course,what it would mean in the event of a Brexit.

In the latest ranking of the Global Financial Centres Index, London is still leading the pack while Frankfurt has lost ground. Germany's leading financial center slipped four positions to number 18 in the worldwide ranking.

The Global Financial Centres Index gauges the competitiveness of financial centers based on the assessments of more than 2,500 financial experts. It also uses data from the World Bank, the Organisation for Economic Co-operation and Development (OECD) and the Economist Intelligence Unit. The Global Financial Centres Index, which is sponsored by the Qatar Financial Centre Authority, is published twice a year.

But in the case of a Brexit, London would also be losing ground - especially when it comes to its dominant role in foreign currency trading. If the UK's voters opted for a British exit from the European Union, the consequences could be dire, a study by the ACI Financial Market Association points out.

Brexit: a disaster for London's forex market

London's role as the world's main currency trading hub would be threatened by a Brexit, with Frankfurt, Paris, New York and Dublin to become the main beneficiaries, a survey of 12,000 market professionals showed.

Frankfurt skyline

Frankfurt, dubbed "city of the euro," is home to the European Central Bank

The poll of worldwide members of the ACI Financial Market Association viewed Frankfurt as the center most likely to benefit if Britain voted to leave in the June 23 referendum, echoing warnings from a number of major banks.

London's domination of around half of the $5-trillion (4.2-trillion-euro) a day global currency market has been at the heart of the huge investments made by the world's major lenders in the City.

A number of European officials have already warned that the European Central Bank might not allow it to continue as the main trading hub for the euro, were the country to leave the EU.

The poll also showed that 80 percent of respondents believed Britain would vote to stay in the 28-member bloc.

Different bets on the pound

If Britons vote to retain their European Union membership card on June 23, the pound would gain 4 percent against the dollar in the immediate aftermath, a Reuters poll forecast on Thursday.

However, if opinion polls and bookmakers proved wrong again and Britain decided to walk away from the EU, the currency would fall 7 percent, the poll suggested.

tko/ hg (Reuters, dpa)

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