Brexit negotiations thread

[londonblue]

Just a query but which banks might move their offices and what are these contingency plans - or is this in reference to ongoing reports on such lines from those informed rags the Guardian and Independent?

It's all the major investment banks. I have friends that work for them. They are all making plans. It might come as a surprise to some people, that banks are inherently risk averse. (Yes, they do have some high risk strategies, but that is only a small proportion of their portfolio.) They have all made / are making contingency plans. Why would anyone expect otherwise? Whether or not they need to put these plans into practice will be dependent on what kind of deal is struck.

 

[kaymac]

Are they now? I'd better tell my son, he works for one of the big outfits, can't have him being kept in the dark like that.... can I ?

Contingencies in setting up and/or bolstering-up their EU based operations, yes, that was always going to occur and has been happening for quite a while, but moving lock, stock and barrel? Hmm, seeing is believing on that score, so saying if the likes of Goldmans up-and-went I for one wouldn't shed a tear.

 

[callan]

I guess the concern here, though, is that the EU were happy to allow that level of agreement with Canada because it is Canada. With the UK, they may try to exclude that simply because they see it as an opportunity to "encourage" the banks to move their offices to the EU, and therefore take as much of London's business as they can. Certainly if I were negotiating on behalf of the EU that is what I would be looking to do, especially as they know all the banks are making contingency plans.

Only time will tell.

Based on 2016 figures.

UK-based financial services account for 40 per cent of Europe’s assets under management, and 60 per cent of its capital markets business.

UK-based banks provide more than £1.1tn of loans to other EU member states.

There are 5,500 British firms using passports into Europe, and over 8,000 EU and EEA passports operating in the UK.

London has extended its position as the worlds leading financial sector since Brexit.

Primarily it will be those that deal in Euros that will leave the UK...so if this were to be your negotiating position you need to work out where that 1 trillion plus amount of loans were coming from as well as the expertise. to make them.

 

[londonblue]

Are they now? I'd better tell my son, he works for one of the big outfits, can't have him being kept in the dark like that.... can I ?

Contingencies in setting up and/or bolstering-up their EU based operations, yes, that was always going to occur and has been happening for quite a while, but moving lock, stock and barrel? Hmm, seeing is believing on that score, so saying if the likes of Goldmans up-and-went I for one wouldn't shed a tear.

Where have I said moving lock stock and barrel?

 

[londonblue]

Based on 2016 figures.

UK-based financial services account for 40 per cent of Europe’s assets under management, and 60 per cent of its capital markets business.

UK-based banks provide more than £1.1tn of loans to other EU member states.

There are 5,500 British firms using passports into Europe, and over 8,000 EU and EEA passports operating in the UK.

London has extended its position as the worlds leading financial sector since Brexit.

Primarily it will be those that deal in Euros that will leave the UK...so if this were to be your negotiating position you need to work out where that 1 trillion plus amount of loans were coming from as well as the expertise. to make them.

Exactly. There is 40% of the entire EU business up for grabs, and all the cities in the EU will be licking their lips at taking on as much of that as they can. If London has extended its position (which is not really proved with figures that are at best a year out of date) in the short term, then great. However, over the course of 2016 any increase in business may well have been down to the dramatic fall in the value of the pound post referendum, making us a cheaper investment option. (Certainly property lawyers I know were saying that there was a big increase in property being bought by overseas investors.) So, even if that were the case, I doubt it would last, especially as these banks have already moved some functions out of London.

As I said, however, whether or not this continues (i.e. whether or not contingency plans are acted upon) depends on the deal that is agreed, but if I were one of the EU negotiators I'd be making this as hard for London as possible. There are billions to be had.

 

[Tangled up in Blue]

Based on 2016 figures.

UK-based financial services account for 40 per cent of Europe’s assets under management, and 60 per cent of its capital markets business.

UK-based banks provide more than £1.1tn of loans to other EU member states.

There are 5,500 British firms using passports into Europe, and over 8,000 EU and EEA passports operating in the UK.

London has extended its position as the worlds leading financial sector since Brexit.

Primarily it will be those that deal in Euros that will leave the UK...so if this were to be your negotiating position you need to work out where that 1 trillion plus amount of loans were coming from as well as the expertise. to make them.

38% according to a financial anaylist on the Daily Politics at lunchtime .Presumably based on more recent figures.:winking:

Exactly. There is 40% of the entire EU business up for grabs, and all the cities in the EU will be licking their lips at taking on as much of that as they can. If London has extended its position (which is not really proved with figures that are at best a year out of date) in the short term, then great. However, over the course of 2016 any increase in business may well have been down to the dramatic fall in the value of the pound post referendum, making us a cheaper investment option. (Certainly property lawyers I know were saying that there was a big increase in property being bought by overseas investors.) So, even if that were the case, I doubt it would last, especially as these banks have already moved some functions out of London.

As I said, however, whether or not this continues (i.e. whether or not contingency plans are acted upon) depends on the deal that is agreed, but if I were one of the EU negotiators I'd be making this as hard for London as possible. There are billions to be had.

Agreed.

 

[callan]

Exactly. There is 40% of the entire EU business up for grabs, and all the cities in the EU will be licking their lips at taking on as much of that as they can. If London has extended its position (which is not really proved with figures that are at best a year out of date) in the short term, then great. However, over the course of 2016 any increase in business may well have been down to the dramatic fall in the value of the pound post referendum, making us a cheaper investment option. (Certainly property lawyers I know were saying that there was a big increase in property being bought by overseas investors.) So, even if that were the case, I doubt it would last, especially as these banks have already moved some functions out of London.

As I said, however, whether or not this continues (i.e. whether or not contingency plans are acted upon) depends on the deal that is agreed, but if I were one of the EU negotiators I'd be making this as hard for London as possible. There are billions to be had.

There are billions to be lost by the EU as well, in addition to you still not answering which financial centre will provide 1 trillions worth of loans....notwithstanding the expertise needed to make that happen.

So by making things hard for London, you actually do damage to yourself even if no deal were to be achieved and some banks and financial service institutions were to move in their entirety....you would have one hell of a liquidity problem for the whole of EU.

 

[londonblue]

There are billions to be lost by the EU as well, in addition to you still not answering which financial centre will provide 1 trillions worth of loans....notwithstanding the expertise needed to make that happen.

So by making things hard for London, you actually do damage to yourself even if no deal were to be achieved and some banks and financial service institutions were to move in their entirety....you would have one hell of a liquidity problem for the whole of EU.

I'm really not sure what point you're trying to make regarding loans. The terms of any loads are already in place, how is that going to change? The only change is that future loans may not involved London at all, which will be even more business lost.

Either way, whatever business is being done now is largely irrelevant. The point is that there is a huge amount of business up for grabs in the future, and the EU would be mad not to try and take as much of that for themselves as they can. They don't even have to be successful in the long run, they just have to make enough noise, and drag things out long enough for the banks to lose their nerve, even if they eventually concede to the UK.

 

[callan]

I'm really not sure what point you're trying to make regarding loans. The terms of any loads are already in place, how is that going to change? The only change is that future loans may not involved London at all, which will be even more business lost.

Either way, whatever business is being done now is largely irrelevant. The point is that there is a huge amount of business up for grabs in the future, and the EU would be mad not to try and take as much of that for themselves as they can. They don't even have to be successful in the long run, they just have to make enough noise, and drag things out long enough for the banks to lose their nerve, even if they eventually concede to the UK.

Existing loans are of course in place...potential and future loans aren't.

If the EU wants to borrow a trillion pounds after Brexit where are they going to go for it...if it isn't London then New York?, Tokyo?....where?

And if you can't answer... how are European businesses and countries going to manage....that is the point.

 

[rigsby]

It's all the major investment banks. I have friends that work for them. They are all making plans. It might come as a surprise to some people, that banks are inherently risk averse. (Yes, they do have some high risk strategies, but that is only a small proportion of their portfolio.) They have all made / are making contingency plans. Why would anyone expect otherwise? Whether or not they need to put these plans into practice will be dependent on what kind of deal is struck.

I thought that was the foundations of the Remain argument......Things that never have and never will happen

Banks moving to Germany ( now its only skeletal staff in a small offices to get round EU laws)
No investment in Britain. ( Michael Bloomberg, former Mayor of NY has just opened a 1m-sq-ft state of the art £1bn European financial and data media company near St Paul's......Stating "London will always be the financial centre of Europe"

Looks like Mr Bloomberg recognises that, as history has proved, London is far less risk than Europe.

 

[callan]

Looks like Mr Bloomberg recognises that, as history has proved, London is far less risk than Europe.

This is the difficulty of LB's position....London is the financial capital of the world...where EU countries and Companies go for investment...if Barnier were to follow the Position of LB it would be akin to him turning into Wilkins Mcawber.

 

[londonblue]

Existing loans are of course in place...potential and future loans aren't.

If the EU wants to borrow a trillion pounds after Brexit where are they going to go for it...if it isn't London then New York?, Tokyo?....where?

And if you can't answer... how are European businesses and countries going to manage....that is the point.

So, as I said existing loans are already in place, and nothing will change that. I'm talking about future business. You even said it yourself: the UK is 40% of the EU business. That is all up for grabs, and the EU will do its utmost to win as much of that business as they can.

How the EU finances itself after we leave is impossible to answer. Who knows where the best deal will be. It could be anywhere. Why assume the UK will give the best deal? Are you really so arrogant as to believe that the EU will ONLY want to come to us.

However, it seems to me that you're doing what you usually do, and muddying the water. As I said, this is all largely a moot point. The fact is that 40% of the EUs total business is up for grabs, and the rest of the EU will do their best to take as much of that business as they can. As I also said, it doesn't even matter if they eventually lose that battle, all they need to do is make it as difficult as they possibly can so that the banks get nervous and move even more functions abroad. Once they've gone they won't be coming back because it won't make financial sense to move again.

As I have also said, how much that happens will depend on the deal that is agreed.

Are you trying to argue that the EU won't try and win as much business as they can?

Edit: So, a lesson for all of us at my expense: Don't try to read and concentrate on a proper discussion on Shrimperzone whilst in a work meeting! I've re-read some of this since I've been home, and now realise what you were harping on about. You do have a point that the UK will still have substantial capital that the EU might still want access to. EU policitians will be aware of that, so it may limit the amount of business they can "steal" from London. However, it will still mean that business will be lost, just less than could have been lost.

Interestingly I've been having a similar discussion with a friend of mine recently. He's a financial services lawyer who left Unicredit (Italian bank) recently and now works for a law firm. This is what he said:

I think EU are trying to grab as much from the UK as they can. It's an unexpected bonanza for them and they think we are mental. The relatively modest amount of jobs leaving the UK from 29 March 2019 is just the beginning of what will be a steady trickle over years. The big thing in UK's favour is very good market of skilled financial services workers and everyone wants to live in London and not Paris or Frankfurt or Dublin. London will still be important.

I guess that also proves another point: that there are always three sides to an argument. One side, the other side, and somewhere in the middle is the truth!

 

[kaymac]

Where have I said moving lock stock and barrel?

I asked you what banks might move their offices (not move a few people or the odd department or a building) 'and you replied - 'its all the major investment banks' - which indicated you meant a total 100pct move.

Perhaps you're just generalising when you really meant some parts of the banks could/would move in accordance with their ongoing contingency plans? The contingency processes have been underway for ages, nothing new there, and by nature banks review and re-organize their operations quite frequently.

 

[Yorkshire Blue]

I voted for a red, white and blue brexit

Norway then.

And if you can't answer... how are European businesses and countries going to manage....that is the point.

This mistrust of experts has to stop.

 

[Yorkshire Blue]

The FT's research suggests that the value of Britain's output is now about 0.9% lower than if the country had voted to remain - this equates to almost exactly £350m a week!

 

[MK Shrimper]

The FT's research suggests that the value of Britain's output is now about 0.9% lower than if the country had voted to remain - this equates to almost exactly £350m a week!

But that money's going to the NHS....oh. :sad:

 

[Gremlin]

Primarily it will be those that deal in Euros that will leave the UK...so if this were to be your negotiating position you need to work out where that 1 trillion plus amount of loans were coming from as well as the expertise. to make them.

They wouldn't necessarily need to relocate completely, just move that particular part of their operation. It could be drastic or it could be as simple as moving a server or two and some IT support staff, reassigning the same to a non-UK entity. The truth is likely to lie somewhere inbetween.

 

[londonblue]

I asked you what banks might move their offices (not move a few people or the odd department or a building) 'and you replied - 'its all the major investment banks' - which indicated you meant a total 100pct move.

Perhaps you're just generalising when you really meant some parts of the banks could/would move in accordance with their ongoing contingency plans? The contingency processes have been underway for ages, nothing new there, and by nature banks review and re-organize their operations quite frequently.

Nope. It indicates that you misunderstood.

 

[callan]

So, as I said existing loans are already in place, and nothing will change that. I'm talking about future business. You even said it yourself: the UK is 40% of the EU business. That is all up for grabs, and the EU will do its utmost to win as much of that business as they can.

How the EU finances itself after we leave is impossible to answer. Who knows where the best deal will be. It could be anywhere. Why assume the UK will give the best deal? Are you really so arrogant as to believe that the EU will ONLY want to come to us.

However, it seems to me that you're doing what you usually do, and muddying the water. As I said, this is all largely a moot point. The fact is that 40% of the EUs total business is up for grabs, and the rest of the EU will do their best to take as much of that business as they can. As I also said, it doesn't even matter if they eventually lose that battle, all they need to do is make it as difficult as they possibly can so that the banks get nervous and move even more functions abroad. Once they've gone they won't be coming back because it won't make financial sense to move again.

As I have also said, how much that happens will depend on the deal that is agreed.

Are you trying to argue that the EU won't try and win as much business as they can?

Edit: So, a lesson for all of us at my expense: Don't try to read and concentrate on a proper discussion on Shrimperzone whilst in a work meeting! I've re-read some of this since I've been home, and now realise what you were harping on about. You do have a point that the UK will still have substantial capital that the EU might still want access to. EU policitians will be aware of that, so it may limit the amount of business they can "steal" from London. However, it will still mean that business will be lost, just less than could have been lost.

Interestingly I've been having a similar discussion with a friend of mine recently. He's a financial services lawyer who left Unicredit (Italian bank) recently and now works for a law firm. This is what he said:



I guess that also proves another point: that there are always three sides to an argument. One side, the other side, and somewhere in the middle is the truth!

So in summary you cant tell us where future loans will come from but you would be prepared to put the EU's potential borrowing at risk by cutting yourself off from the worlds largest financial market based on the hope that you will win some business in the process.

You would do this with the knowledge that already German and Italian banks are struggling and in a climate where the EU is in fledgling economic recovery.

It is not my arrogance that dictates if the EU cuts London out they will need to seek funding elsewhere....which is likely to not not be as cost effective or have the same regulatory standard...it is your own desire to be right at any cost blissfully ignoring the risk of self harm you pose....having said all that there's nothing the EU likes more than a good old bail out when it all goes wrong eh?

 

[Tangled up in Blue]

http://www.bbc.com/news/business-42420829

Looks like we're prepared to make it easier for EU banks to to do business in the UK after Brexit.

Wonder if there'll be a quid pro quo? :winking: