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What would be the economic cost to the global economy if London was destroyed right now


The world would lose the London Stock Exchange. It is one of the world's oldest stock markets. About 2,490 companies are listed on the Exchange, with a total market value of $4.59 trillion. The exchange is the 2nd largest stock market in Europe and 6th largest globally after NYSE, NASDAQ, Japan Exchange, Shanghai and Euro-next. Monthly trade volume is $219 billion. It is the most global of all stock exchanges, with firms from over 70 countries admitted to trading in the exchange. There are 60 major stock exchanges throughout the world with total value at $69 trillion. The NYSE, represent $18.5 trillion in market capitalization, 27% of the total market for global equities. Thus if London is destroyed, the world will lose 7% of the total market for global equities. [1]
Secondly, Europe and the world will lose the 2nd largest & 5th largest metropolitan economy in the world respectively in terms of GDP $623 billion. London GDP is same as Saudi Arabia, Sweden, Iran etc. Other major areas include:
  • The investment banks and insurance company capital of Tokyo and electronics headquarters of Osaka in Japan;
  • Munich's high-tech agglomeration of automotive engineering, aerospace, communications, life sciences in Germany;
  • Mumbai's financial district and Bengaluru's biotechnology industries in India. [2] [3]
In addition, the world will lose the busiest city airport systems by passenger traffic (Heathrow, Gatwick, Stansted, Luton, and London City Airport & South-end). About 170,980,680 passengers transited these airports in 2017. From 2010 to 2017, London airports have constantly ranked top. London Heathrow Airport constantly ranks among the top 10 individual busiest airports. Gatwick also ranks among Top 50 busiest airports as well. [4]
Furthermore, 40% of the top European companies have their headquarters in London. For non-European firms, 60% use London as their regional headquarters. London is also Europe’s leading center for high-skill employment. Two in five of the 250 largest companies in the world with a main or European headquarters have it in London. [5]
Finally, the world would lose a major financial center. According to Global Financial Centers Index, London ranks number one five key areas: "business environment", "financial sector development", "infrastructure factors", "human capital", "reputation and general factors.
  • Britain trade surplus in financial services was $71 billion in 2013, more than twice of trade surplus of the United States, Luxembourg and Switzerland.
  • London accounts for approximately 40% of global foreign exchange trading with total transaction up to $1.85 trillion. U.S. share is 19%. More U.S. dollars are traded in London than New York, and more Euros traded than all euro area countries combined.
  • London is the home to over 250 foreign banks – more than the nearest rivals New York, Paris or Frankfurt. It is one of the most important centers for private and investment banking.
  • London accounts for around a 10% share of total world reinsurance. It is the only place where all of the world’s twenty largest international insurance and reinsurance companies are active.
  • London handles close to $3 trillion for asset management for pension funds.
  • London is the second largest center for hedge fund managers after New York with 18% global share.
  • A number of large Sovereign Wealth Funds such as the Kuwait Investment Authority, Qatar Investment Authority, Abu Dhabi Investment Authority and Temasek/General Investment Corporation of Singapore have local representative offices in London.
  • Major derivatives exchanges located in London account for 15% of global trade in commodities. NYSE Liffe, Europe’s biggest exchange for ‘soft commodities’; London Metal Exchange, the leading global exchange for non-ferrous metals; and ICE Futures Europe, the biggest exchange for energy products in Europe.

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