Standard & Poor’s published its “Brexit Sensitivity Index 2019: Who Has The Most To Lose?” report on 28 March. The index measures trade, investment, financial and migration flows between the UK and the 21 countries.

“Ireland, Luxembourg, and the Netherlands are the economies most susceptible to any trade and migratory aftershocks,” the survey stated. Luxembourg rose from third place in S&P’s 2016 ranking to second place in its 2019 study.

According to last week’s S&P report:

“Luxembourg's sizeable claims on U.K. financial institutions, and high exports (many rebooked via Luxembourg for tax purposes) explain its position as the second most vulnerable country.”

However, much of Luxembourg’s investment in Britain has been made by the local investment vehicles of foreign firms, or special purpose entities. S&P analysts wrote that means:

“As a consequence of the export and capital flows connected to these SPEs, Luxembourg’s BSI probably overstates its vulnerability to Brexit. Nevertheless, as a small open financial services center that uses its sovereignty to operate as a financial conduit for many of the world’s largest companies, Luxembourg is vulnerable to any effects that the U.K.’s departure from the EU might have on its vast financial and business services sectors.”

Graphic: S&P Global Ratings

The credit agency said that, collectively, banks in Belgium, Germany, Ireland and Switzerland “have cut their exposures to U.K. counterparties” since the Brexit referendum, while those in France, the Netherlands and Spain “have increased their U.K. business, when measured on an ultimate risk basis.”

Overall, out of the 21 countries, the least exposed to Brexit are Finland, Austria and Italy. Only two of the 21 are non-EU members: Canada and Switzerland.