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So what now for Brexit?

Discussion in 'Personal' started by dumpty, Dec 13, 2018.

  1. dumpty

    dumpty Star commenter

    As I believe a poster on here said of Hammond, 'he trolls everyone'. I'm sure he is good with figures and books - but a collegial/trusty colleague he ain't.
     
  2. peakster

    peakster Star commenter

    So give the job to Grayling

    What could possibly go wrong.
     
  3. Burndenpark

    Burndenpark Star commenter

    I thought the job we were talking about was that of Chancellor of the Exchequer - not Chief Agony Aunt
     
    mathsmutt and dumpty like this.
  4. florian gassmann

    florian gassmann Star commenter

    London is the second largest financial centre in the world, so that should not be surprising. It handles much of the EU's financial trade and is the clearing house for euro-denominated interest rate swaps - something that is not expected to change after Brexit.

    The reason London is the second largest financial centre in the world is because financiers and banks in Europe, as elsewhere, respect the way London finance is regulated. In particular, the so-called "Big Bang" swept away many of the archaic practices and associated costs that still weigh down many stock exchanges around the world.

    UK financial institutions have had branches in Europe for as long as anyone can remember. In order to meet EU regulations after Brexit, some have had to nominate one of their European offices as their Head Office. This has been done over the last (nearly) three years, which is why you don't hear much concern from the City about Brexit. They are aready nicely set up for it.

    As far as trade figures are concerned, it is the locations of the supplier and purchaser that matter, not whether the goods arrive via Timbuktu.
     
  5. Stiltskin

    Stiltskin Lead commenter

    However Brexit will mean the UK doesn't have easy access to the EU market. They will be subject to more regulation in order to do trade in that market. Passporting has been ruled out. Companies are already choosing EU bases, rather than London to counter that. Yes we'll be okay short term, but the restrictions will mean Frankfurt and Dublin will start to take London's trade. The EU is a much bigger market that the UK so will be more enticing

    I would think that moving services and jobs to another country would have a negative financial impact on the country they were leaving? You're removing the financial services you'd normally export to that market as the services would have to be carried out in the relocated/subsidiary place. The EU has already stated that shell/letter box companies would not be allowed. So that also has tax revenue implications.

    You'd better tell Catherine McGuiness, Stephen Jones, Barosso and Andrew Bailey who seem to have rather large concerns.

    Circular argument - it's where the goods/service enter that market that matter. Else you may as well differentiate down to Northern Ireland/Wallonia.
     
    dleaf12, mathsmutt and lexus300 like this.
  6. florian gassmann

    florian gassmann Star commenter

    No, they are expected to trade as now under equivalence rules.

    I don't know why you keep saying that, as it is not in general true of financial services. As I said, some have had to nominate one of their EU branches as head office - that does not mean leaving the UK and nor does it generally mean moving staff.

    According to the Corporation of London, as few as 5,000 job losses could be expected as a result of Brexit, from more than 751,000 people working in finance in London (that's 0.67%), with most of those being non-UK citizens returning to work in the rest of the EU (as we saw with the EU Medicines Agency).

    As she says, London is not being granted special access. Just ordinary access through equivalence, which is what I (and others) have said.

    The Rotterdam-Antwerp effect is well understood, and calculations are used to avoid that distorting the trade figures of each EU country.
     
    lexus300 likes this.
  7. dleaf12

    dleaf12 Lead commenter

    Slightly alarmed that the Remain wing of the Tory party seems to be in retreat. All the leadership contenders so far seem to be of the Brexit persuasion. Do they really think "delivering Brexit" will re-habilitate the party with the electorate?...

    It seems to me the Tory party will have to split into two parties one pro and the other anti europe. Which one gets to call itself "Tory" and which gets to think of a new name?
     
    mathsmutt likes this.
  8. peakster

    peakster Star commenter

    Like the chaos party
     
    mathsmutt likes this.
  9. LondonCanary

    LondonCanary Lead commenter

    Only Johnson, Gove and Raab are hardline but are the ones that matter.
     
  10. dumpty

    dumpty Star commenter

    What choice do they have? May's deal was universally hated. Every Tory sitting in the HoC does so on a promise to back a manifesto that took us fully out of the EU.

    May's deal is dead, Corbyn is not going to relent from wanting a GE election. Farage is possibly on the march this Sunday.

    It is nigh on impossible for the new leader to be a remainer. One tried, she failed. Miserably.

    The biggest fear for remainers is if the Tories can swing the fear factor pendulum back against no deal and towards 'give it a go'. By that I mean May never took up the propaganda fight of taking the fear out of WTO rules, she never challenged this 'cliff edge' language and 'job losses in the hundreds of thousands' and the price of cheese costing more than a new Aston Martin etc.

    Those like Rory Stewart who says he will not work with Boris should Boris advocate no deal will have to choose between their principles on Brexit v love of power. As it should be.

    Farage will be watched closely. If a few million votes went his way then simply put, the new leader knows there are votes to be had in going for a true Brexit.

    Even if it means a GE.

    My guess is Boris will try to get a deal based on we walk if not and see if the EU blinks. Expecting Stewart, Rudd, Hammond et al to vote down the government, themselves out of politics for good AND shoehorn Corbyn into power.....???
     
  11. dumpty

    dumpty Star commenter

    Gove is Corbyn light. Not as confused and fudged but getting there. I would expect him to tackle Brexit in exactly the same way as May.

    Badly and all over the place.
     
    border_walker likes this.
  12. Stiltskin

    Stiltskin Lead commenter

    We don't trade under equivalence rules with other EU countries at the moment. We have complete access because we are in the EU.

    When we leave the EU we won't have that access. We will have the more limited access that the EU will decide - the equivalency that you're talking about, Possibly it will be as good as the US and Japan has at the moment, although parts can be withdrawn in as short as 30 days, as we obviously align with their requirements.

    There is no equivalence though for -Banking (excepting portfolio management, investment advice), asset management or direct insurance.Which means there is also no passporting of these. Companies wishing to offer these in the EU will have to set up independent subsidiaries. This will lead to a reduction in tax revenues and jobs in the UK. If we're lucky it won't be large, I would imagine though EU financial centres will take advantage of it and pull more companies over there.

    (see https://www.reuters.com/article/us-...ins-banks-face-patchy-eu-access-idUSKCN1NK1HM or https://www.linklaters.com/en/insig...ost-brexit-equivalence-does-not-mean-equal-to
    https://openeurope.org.uk/today/blo...ption-for-uk-financial-services-after-brexit/.)

    They were hoping for mutual recognition, which has been ruled out. The buildings may stay but the services will be happening in another country except where passporting is allowed. Staffing will probably be small to begin (like the 400 or so to Lloyds Brussels subsidiary) but could increase quickly depending on what deal the UK gets.
     
    dleaf12 and mathsmutt like this.
  13. burajda

    burajda Star commenter

    Post Brexit the City of London will do fine, some absorbable losses. London in most sectors is better placed than other parts of the country to ride out the Brexit fall out.
     
  14. burajda

    burajda Star commenter

    What trade deal includes financial services? Then discussions are about equivalence in regulation, the City will generally be quite happy to co-operate with rules from Frankfurt. The UK has led the EU on negotiating equivalence-based agreements with the US for the most risky parts of the market and the ECB has been committed to free capital movement for 20 years or more. So long as British and Brussels politicians keep at arms length the City and its continental counterparts will continue work closely together.
    In the event of No Deal and an antagonistic political fall out with the EU then still all is not lost, Even without passporting or an equivalence regime, the UK and EU institutions still have international law protection so cross-border services could still be arranged through wholesale clients without actually being registered in that client’s member state.
    There are certainly risks on both sides, an irresponsible, politically driven No Deal should be avoided at all costs. On the other hand the eurozone, EU and its larger individual member states are likely to face a number of unpredictable financial, economic or political crises.
     
  15. racroesus

    racroesus Star commenter

    We're certainly in a state.
     
    mathsmutt and Stiltskin like this.
  16. racroesus

    racroesus Star commenter

    But he will have the best chance of defeating Corbyn and that is more important to remainer MPs than remaining.
     
    dumpty likes this.
  17. Stiltskin

    Stiltskin Lead commenter

    Not a trade deal. What ever package the EU decides to offer us. See previous post about the large number of sectors that equivalency doesn't cover. International law gives us access to the minimum, and applies to everyone. It doesn't give you complete access to the market or the right to circumnavigate the protective regulatory measures the market has in place.
     
  18. florian gassmann

    florian gassmann Star commenter

    Yes, I'm sure it will - in fact, I'm not even sure about some absorbable losses as the prospect of Brexit seems to be bringing about more business than ever for the financial sector, from Lloyds of London opening a European subsidiary in Brussels to Rees-Mogg (sorry to mention him) opening an office Dublin.
     
  19. lexus300

    lexus300 Star commenter

    Perhaps they now realize that they must implement what the majority voted for instead of what a minority voted for.
     
  20. lexus300

    lexus300 Star commenter

    A Swedish view of Brexit.

     

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