Just why is the globe\’s international financial centre on a rainy island off NW Europe? Sure, we could argue that it\’s some remnant of Empire, could argue about language, all sorts of things.
We could also note an interesting historical point: there have been two great bursts of globalisation. 1880 ish to 1914 and 1980 ish to today. Both times Germany has, in the international division of labour, specialised in heavy manufacturing, the UK in finance.
I\’ve long argued, not particularly seriously mind, that it\’s to do with the Common Law. We have a legal system which is flexible enough to incorporate the complexities of financial contracts and financial innovation.
I might not be all that far wrong either:
Here is the actual Irish legislation which is just one page; the main action is in the attached schedule which is the Intercreditor Agreement signed between the Eurozone countries excluding Greece that governs the overall loan. Here’s a little irony –
This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and shall be construed in accordance with English law.
Thus, as with the day-to-day operating language of the Eurozone, when it came time to need a legal architecture for an agreement among the countries, it is supplied by its most prominent non-member.