Is Amsterdam going to be the new London? Some people seem to think so. Ever since last June’s Brexit vote, there has been serious talk of the Dutch capital as a potential candidate – if a slightly less obvious one than Paris, Frankfurt or Dublin. The American professor of business journalism, James B Stewart, even pronounced Amsterdam the “winner” in his column for the New York Times.



Among his reasons are the people’s impressive grasp of the English language, their good international schools, and the picturesqueness of their capital. On top of that, Amsterdam already is a centre of international commerce, has one of the best European airports, and has a very good rail network that takes you to Brussels in a mere two hours.

Some European cities have made overt attempts to present themselves as a viable alternative to London as the financial capital of Europe. Shortly after the Brexit vote, a truck with a billboard advising “Dear start-ups, Keep calm and move to Berlin” was seen driving through London. Online advertisements aimed at international banks emerged saying “Welcome to Paris Region”, and more than 4,000 British-based executives were contacted to point out the advantages of the French capital.

The idea that the entire City of London will pack up and move to another city is not very realistic Kajsa Ollongren

Amsterdam kept a low profile and did none of that. But Kajsa Ollongren, the city’s deputy mayor in charge of economic affairs, did make three trips to London to talk to firms that could consider Amsterdam as an alternative business location.

“The idea that the entire City of London will pack up and move to another city is not very realistic,” she says. “It’s much more likely that only specific sectors will want to move to the continent. I do hear from some firms that they are considering the possibilities, though – and Amsterdam is certainly seen as one.”

Ollongren’s strategy is to focus on sectors for which Amsterdam could be especially attractive, such as fintech, clearing and high-frequency trading. “Fintech is big in the City and it’s emerging in Amsterdam – so there’s a match,” she explains. “Dutch clearing houses have an excellent reputation and they are perfectly able to do their work in English, so that’s another branch that could attract interest. We think it’s more effective to focus on specific slices of the cake.”

The Dutch capital has a good rail network and is seen as the gateway to Europe. Photograph: funky-data/Getty Images

Two of the greatest advantages of Amsterdam are, according to Ollongren, its excellent digital connectivity and the fact that it already has a financial sector – as opposed to Berlin – although the German capital might be stronger than Amsterdam when it comes to startups. Another important selling point is its geographical position: “Amsterdam is considered to be the gateway to Europe. Here we definitely beat Dublin.”

“Amsterdam will undoubtedly get their share after Brexit,” says Roel Beetsma, professor of economics at the University of Amsterdam. “I expect it will attract businesses in the sectors it’s good at – payment transactions, for example. The Netherlands also has strong insurance and pension sectors and big data storage centres. That can be interesting for some companies. But in the end, it will remain small fry.”

According to Beetsma, scenic canals and a fluency in English are not enough to attract the biggest financial institutions. When it comes to atmosphere Amsterdam can beat Frankfurt hands down, but certainly not when it comes to the size of its financial sector.

“The Dutch financial world has suffered severe blows during the financial crisis of 2008. Banks have witnessed layoff after layoff. A lot of employment has disappeared and there are still jobs at risk. The financial industry is too small to make Amsterdam an interesting location for the really big banks,” he says.

‘The wisest thing for Amsterdam would be to focus on its strengths,’ says Audrie van Veen. Photograph: Michael Kooren/Reuters

Another issue is the country’s severe cap on bankers’ bonuses: no more than 20% of annual salaries. “Big financial businesses look for a place where the restrictions on salaries are as small as possible,” Beetsma says. “Compared to London, salaries are low in Amsterdam – that is a major stumbling block. So I think Paris and Frankfurt will turn out to be the winners in the end.’’

Dutch Europe expert Audrie van Veen agrees there won’t be one single European city that absorbs all the companies and financial institutions that are considering leaving London.

“First of all, I think London will remain an important financial hub. And the companies that do leave will spread out over various cities on the continent – Amsterdam will not be the city that benefits the most,” van Veen predicts.

“The wisest thing for Amsterdam would be to focus on it strengths, like innovation and digital connectivity; to attract businesses that otherwise would have established their headquarters in London but are now looking for other possibilities.”



Indeed, such developments are already taking place. Last year Japan’s biggest bank, the Mitsubishi UFJ Financial Group, expanded its office in Amsterdam with personnel from London; it now serves as the headquarters for all its continental activities. Other major Japanese financial institutions are said to be considering similar moves.

“Mitsubishi’s decision was already in the making, but was probably accelerated by the Brexit vote,” Ollongren says. “I have nevertheless congratulated them on their strategic choice. I strongly believe this will attract other European headquarters of Asian banks to Amsterdam.’’

Ollongren is, however, not optimistic when it comes to the wider economic effects of Brexit. “It’s basically not good for Amsterdam, or the whole of Europe for that matter – we miss out on a lot of investments due to all the insecurity. But if Brexit has to happen,” she adds, “it’s wise to make sure Amsterdam attract parts of the financial sector.”

Van Veen warns of even greater hazards: “With the rise of populism in Europe and the looming disintegration of the European Union, it is doubtful whether the so-called ‘new London’ will be in Europe after all. It could well turn out to be New York, Singapore or Hong Kong.”

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