The City has spent millions of pounds promoting London as a home for the European central bank in a campaign strongly supported by Robin Leigh-Pemberton, the Governor of the Bank of England.
There were fears that if the bank went to Germany or the Netherlands it could attract in its wake many of the hundreds of international banks which have chosen London as their European headquarters.
But with the future of exchange rate and monetary co-operation now in doubt, the single currency, the unified central bank and its precursor, the European Monetary Institute, could be abandoned altogether.
In that case, Europe's loss would be London's gain. Monetary union would have slashed the amount of currency dealing and eaten into the City's business. The continuing existence of a dozen volatile currencies would make foreign exchange dealing an even more profitable activity than it is now.
But the dice could fall several ways. If the French voted for Maastricht convincingly enough for the treaty to be implemented, there would still be a question about whether Britain and the other weaker currencies in Europe would be included.
Germany, the Benelux countries and France might lock their currencies together, leaving the UK, Spain, Italy and the others on the fringes, linked through a loose arrangement similar to the exchange rate mechanism.
Britain would have no say in monetary policy and its currency would be hanging on to the tail of powerful neighbours to an even greater extent than now. The ERM survived for most of its life without Britain and there is no reason why a permanent British departure need put it out of action.
But whatever happens to the ERM, the City has one great advantage in fighting off competition from other financial centres. It long ago reached a critical mass that makes it an attractive place to locate, simply because so many other banks and investment firms are there already.
London is by far the largest and most successful financial market in Europe. It has the greatest concentration of jobs in the financial industry found anywhere in the world. In some specialities, notably foreign exchange and international bonds, it is the biggest in the world.
Many large European companies have been withdrawing from cities on the continent and centralising their foreign exchange dealing in London, which trades a huge range of currencies. Indeed, before the ERM upheavals, the City perceived poor transport and expensive housing as a much greater threat to its competitive position than the location of a European central bank or future monetary co-operation.
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