Recent years have been among the toughest for European stock exchanges in decades. Despite modernization efforts, such as in London, key indicators show a decline: in 2023, only six companies went public, raising just $208 million—the lowest level in thirty years. While global and US markets are growing, European IPO volumes have halved, whereas in the US they have risen by 40%.
Even well-known European firms like Klarna and Arm are bypassing London or Amsterdam for listings, preferring New York for its stronger financial and investment prospects. As a result, European exchanges risk remaining mere transit zones between America and Asia, losing out on new listings and investors.
Historically, London and Amsterdam were market leaders, but today the number of companies on the London Stock Exchange has fallen by nearly a fifth, and total capitalization stands at $5 trillion—comparable to a single American firm, Nvidia. The reasons go beyond regulation; Europe’s investment landscape is conservative, with households saving in banks rather than investing in stocks.
In the US, broad participation in the stock market is driven by pension schemes that give ordinary citizens market access. In Europe, reliance on state pensions and cautious private funds (mainly in the UK, Denmark, and the Netherlands) directs more capital into government bonds than stock markets, compounding the outflow of financial resources and lost opportunities.
Many companies, such as Wise and Flutter Entertainment, have already moved or plan to move their listings to the US, centralizing capital across the Atlantic and eroding Europe's financial independence. The causes include conservatism, slow reforms, and incomplete financial infrastructure, such as the unrealized project of a single EU capital market.
Some reforms in the UK have been introduced, including relaxed listing rules, but results are limited thus far. Europe must enact structural changes in finance, investment, and support for startups and businesses, or risk remaining an intermediary between global financial leaders.
