Post by pamelaPost by tim...Post by pamelaPost by James HarrisAs I posted earlier in reply to someone, Jes Staley, chief
executive of Barclays, pointed out that rather than simply
London needing access to the EU the EU will want access to
London as a source of finance. "The users of capital find the
providers of capital, not the other way around". Of course,
it's a two-way street but his comments nonetheless give an
idea of priorities.
http://www.telegraph.co.uk/business/2016/11/16/barclays-
boss-londons-gravitational-pull-on-finance-will-not-wan/
With a few exceptions (such as EU financial institutions like
EBRD, EIB, CEB, etc), I would agree that the EU is not going to
intervene on its own account in capital markets nor in other
city activities but it is the EU who can set rules,
restrictions and tax laws for its members to abide by.
Oh so you think that the EU is going to impose rules on its own
companies about their investment strategies that effectively tie
one (or even both) hand(s) behind their back thus crippling
their own industries
The intention would not be to cripple both sides because the EU
party could use alternative means of finance from within the EU.
but they can't
that's the point
the location of the broker doesn't change the location of the money
Post by pamelaPost by tim...Post by pamelaIt is mainly such a changed regulatory framework which could
easily make the City less attractive to the EU.
Even if the City somehow manages to remain the financial centre
of all Europe,
which it will, because 80% of the business that it currently
does is already with ROW. Why would any of that move?
That 80% seems high. Does it cover all forms of finance or only a
certain sector of the City?
it's the percentage of the 176 billion pounds (apparently) that the city
contributes to the UK economy
but you have to understand that all of these types of business that the city
does are interlinked
one type of city business will share much of its admin/legal costs with all
the other type of city business
Try and take just one type of trading away to somewhere else and it will
have to support, on its own, all of the admin costs of running a financial
centre, and it will likely be significantly more expensive to operate.
Now, if the EU mandates that a few things that are within it regulatory
domain move to the EU, then the uses of these services will have no choice
but to pay the extra costs.
But the idea that because a tiny part of the whole moves, that the rest will
follow, is just nonsense. The costs of doing so for ROW trading would be
too great.
Post by pamelaThe only thing I could find that has
an 80% figure with ROW was "global non-ferrous business". Maybe
that's a Farage figure because he was a metals trader.
https://www.google.co.uk/search?q=city+of+london+80%25+trade+rest+of+world
Do you have a link?
try this one:
http://uk.reuters.com/article/uk-britain-eu-banks-idUKKBN12G101
"Continental business only accounts for 11 percent of Lloyd's gross written
premium, with possibly as little as 800 million pounds directly reliant on a
passport, Open Europe said"
Post by pamelaPost by tim...Post by pamelathe EU can still arrange to take its share of the profits.
That's fine. The City will recover from the EU countries taking
5% of its total business that can reasonably move, but that
isn't what you previously claimed, You said that the EU would
impose restrictions on what EU companies could do to access the
things which are, necessarily still going to be provided from
London due to the economies of scale provided by the "other
80%".
The City is not going to die from Brexit but the EU will minimise
its dependence on the City and this will lead to less financial
trade in the City.
yes
if it isn't significant
who cares?
(apart from a small number of high paid people suddenly out of work, - poor
dears)
Post by pamelaIt is unthinkable that the EU will cheerfully leave trade finance
beholden to, what to them, is an off-shore financial centre based
in London.
But if they push up the costs of their industry borrowing money by a whole
percentage point (and that a percentage point from 3% to 4%, not from 3% to
3.03% - not an unreasonable estimate of the costs) they will cripple their
own industry in pursuit of the dream.
And they know this - they are bluffing!
Post by pamelaPost by tim...You are living in a dream land (though I confess that the city
is helping you by making its own the big presence of Armageddon
should we leave)
Post by pamelaThe City has been a thorn in the flesh of the EU even
while the UK is a member and I imagine the EU will now use the
flux Brexit causes to make some changes.
which will, in the end, be minimal
tim
A newspaper report said this as a summary the City Brexit blueprint publshed last week....
London and Frankfurt will lose out to New York and Singapore
unless a free trade deal on financial services after Brexit is
agreed, according to leading City businesses.
as I have said umpteen times before
this is the city crying wolf in order to persuade HMG to give some
concessions an make like easy for them.
Post by pamelaThe report from
key banks, law firms and fund managers in the UK proposes
this looks to me like they have been marking their own homework
find me the homework marked by someone without a vested interest in the
result
Post by pamelaa
"bespoke" free trade agreement once Britain leaves the EU.
Such a deal would allow British and EU-based financial
companies to sell their products and services without tariffs,
taxes or quotas in each other's markets after Brexit.
it will be Europe's loss if we can't
without a deal we will still be selling much the same, they will be paying
more for it
tim
==
Very informative and interesting post. Thanks, tim.
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