Bank Efficiency in London Versus New York Financial Centers: Sailing Through Brexit’s Wake

This study evaluates the efficiency of London and New York, the two predominant global financial hubs, in the context of the United Kingdom’s withdrawal from the European Union (Brexit). By jointly combining DEA meta-frontier analysis with a Difference-in-Differences (DiD) framework, the efficiency levels of 70 financial firms over the period 2007–2019 are estimated, and the impact of Brexit on banking efficiency is assessed. The findings show that London-based banks initially outperform their New York counterparts in average meta-frontier efficiency; however, a process of convergence emerges, with New York reaching London’s efficiency levels by 2018. The DiD estimates indicate that Brexit played a decisive role in this shift, highlighting how political and regulatory disruptions shape efficiency dynamics in global finance.