TOKYO -- As gloom spreads in the U.K. about a post-Brexit future, the domestic financial industry remains as bullish as ever, insisting it is well-positioned to take advantage of its newfound freedom and historic ties to Asia.
"This is the biggest opportunity," said Peter Estlin, the Lord Mayor of the City of London. "The current system under the EU has been very slow. ... The U.K. individually can help operate on a much faster basis."
Estlin, a former Barclays executive, was speaking in an interview with the Nikkei Asian Review.
His optimism contrasts with growing anxiety within the U.K. about the imminent departure from the single market. On Tuesday, Japan's Honda Motor announced the shutdown of its U.K. plant, putting the employment of 3,500 workers in jeopardy. A little more than two weeks ago, fellow Japanese carmaker Nissan Motor scrapped a plan to produce a new SUV in Britain.
Brexit also means that banks in the U.K. lose their right to sell products elsewhere in the bloc. This has prompted many lenders to relocate their headquarters to other European financial centers, such as Dublin, Frankfurt, Luxembourg and Paris.
The U.K. is scheduled to leave the EU on March 29.
Estlin estimates that somewhere in the region of 5,000 to 10,000 jobs have moved from the U.K. to other European capitals as a result of the U.K.'s Brexit decision. He remains unfazed.
"The nature of business is shifting from pure physical to digital services, an area where the U.K. has increasingly got strength," Estlin said. "I see the U.K. continuing to adopt the policies that were adopted in the past, [those] of wanting to operate in that international marketplace."
He envisages London as the world's startup capital, where people from around the world come to access the global market and to find buyers of their businesses. Estlin said Asia's rising technology sector could become the biggest buyer of London's services, talent pool, capital-raising expertise and networks.
The U.S. is urging its allies to refrain from doing business with Chinese tech companies such as Huawei Technology amid concern about cyber espionage and other risks. Washington is taking the threats seriously, and recently has blocked Chinese companies from making big acquisitions in the U.S.
London is charting a different course, calling Chinese risks manageable.
"We are relatively content in seeing these innovative businesses being bought by larger international companies," Estlin said. "We are not as protective as some other communities are.
"For about 800 years, we in the U.K. have adopted a construct that you are innocent until proven guilty."
Estlin emphasized potential business opportunities in Asia.
"The EU is an important partner for the U.K.," he said, "but on a relative basis, the proportion of trade between the U.K. and the EU is diminishing."
By contrast, he said, Asia will represent 50% of the global economy by 2025. If you go out further," he added, "it will probably increase as a percentage, particularly if you include India within that. The U.K. wants to help facilitate the free flow of trade and services with that economy."
Still, the road ahead isn't expected to be smooth.
Europe has been losing out to the U.S. and Asia in the race to attract Asian IPOs and other capital-raising deals. According to research company Dealogic, there were two Asian IPOs in Europe in 2018. Of the capital Asian companies raised last year, more than 90% was obtained in Asia, only 0.5% in Europe.
But the data also points to Asian companies' strong interest in European companies, as seen in SoftBank Group's acquisition of Arm Holdings and Takeda Chemical's takeover of Shire.
"We are open to Chinese companies, Japanese companies, Singaporean companies, American companies and Russian companies, as long as they abide by the rules and don't break the rules," Estlin said.