The paper, titled 'EU Exit Analysis' says that under an FTA-type scenario, "London's status as a financial centre could be severely eroded" if the EU undertakes measures which are harmful to the UK financial sector and EU-facing businesses then relocate.
In addition, it says that in a strict migration scenario, an option in a WTO scenario, the sector's access to talent could be limited.
The study also shows how GDP would be affected under three scenarios over 15 years.
The government estimates that under an EEA-type scenario, GDP could reduce by up to 10%, with most predictions showing a reduction of around 2.5%.
Under a FTA-type scenario, GDP is expected to fall by 4% but could be reduced by up to 12.5%.
