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Selling the City of London to Europe

by Oui Tue Jul 10th, 2018 at 10:37:39 AM EST

What would Brexit mean for the City of London? | FT - Feb. 23, 2016 |

Jamie Dimon, the outspoken JPMorgan chief executive, could not be clearer about the upheaval he thinks the City of London would suffer outside the EU.

Speaking to the Financial Times, Mr Dimon warns of a "massive dislocation" to the financial hub that would reverse decades of growth for international banks in London and scatter them across Europe and the rest of the world.

Continued below the fold ...


This is far from the first time that the City has heard such prophesies. For veterans such as André Villeneuve, former chairman of the London International Financial Futures and Options Exchange, the debate about whether Brexit would spell riches or ruin brings back memories of late-1990s warnings that ultimately proved groundless. "They said the City would die because the UK wasn't part of the euro," Mr Villeneuve recalls. "They said Frankfurt would be king. But none of that happened." Instead, the City prospered, weathering not just life outside the euro but also the global financial crisis.  

Will London Survive Brexit? by Howard Davies on April 25, 2017

Brexit has set a hungry cat among the financial pigeons of the City of London. No one yet knows what kind of access to the European Union's single financial market UK-based firms will have, and Theresa May's call for a general election to be held on 8 June has further clouded the picture, at least in the short term. But there is a nagging assumption that things cannot remain the same, and that there will be a price to be paid for leaving the EU.

So UK-based financial services firms, especially those that have chosen London as their European headquarters precisely in order to secure access to the whole EU market from one location, are reviewing their options. Indeed, regulators are obliging them to do so, by asking how they will maintain continuity of service to their clients in the event of a "hard" Brexit. (May's government prefers to talk of a "clean" Brexit, but that is semantics.)

Rival European cities have spotted an opportunity to claw back some of this business to the continent (or to Ireland). Other governments have long resented London's dominance. It was galling to have to acknowledge that the principal centre for trading in euro-denominated derivatives lay outside the eurozone.

Just a few years ago, the European Central Bank tried to insist that the clearing of euro derivatives should take place within its jurisdiction, but was prevented from doing so by a ruling from the European court of justice. That is somewhat ironic: removing the UK from the ECJ's jurisdiction is now one of May's principal aims.

So delegation after delegation of ministers, mayors and assorted financial centre lobbyists have been filling London's best hotels and providing a welcome boost to the high-end restaurant trade. Luxembourg, Frankfurt, Dublin and others have been making glossy presentations about their cities' competitive advantages over London: lower property costs, lower corporate tax rates, Michelin-starred restaurants, and Porsche dealerships - all the essential services that make up a vibrant financial centre.

UK to leave single market by March 2019, David Davis suggests | Sky News - June 27, 2017 |

City of London delegation to press Brussels for free-trade deal | FT - July 3, 2017 |

A City of London delegation will head to Brussels this week with a secret blueprint for a post-Brexit free trade deal on financial services, as concern mounts about the damage facing employers if they are forced to move operations to the continent.

The initiative, led by Mark Hoban, the former City minister, is independent of government but has the unofficial support of senior figures in Whitehall, according to three people close to the project.

Financial services companies have long used London as an EU hub, relying on the "passporting" principle in single market legislation to sell their services cross-border from the City.

Business leaders are nervous that the March 2019 deadline for the UK's departure from the EU will come before a credible deal has been struck to retain easy access to EU markets. Banks in particular fear they may have to move thousands of staff to financial centres such as Frankfurt and Dublin. Barclays has become the latest institution to move ahead with plans to shift some operations to the Irish capital.

The Corporation of London has a secret Brexit plan

There's a report coming out later today that sets out the Corporation of London's Brexit plans, and the deal the City wants with Europe. There is also something that occurs to me which might protect the City's interests more than anyone expects. It is the oldest continuous democratic commune in the world, dating back over 2,000 years, and has its own laws to recognise its independence from the rest of the country.

Back in the days of drawing up the Magna Carta in 1215, these rights of independence were embodied in law, and still exist today. These rights include ...

City of London steps up Brexit diplomacy as financial services white paper is shelved | City AM - Jan. 23, 2018 |

The City is seeking to take control of its post-Brexit future by ramping up engagement with EU member states, as it emerges that ministers have shelved plans for a financial services white paper.

Meetings have been taking place with weekly envoys from the City of London Corporation and TheCityUK meeting ministers from across the continent.

Previously, discussions had been on relatively informal terms, but City A.M. understands that the Square Mile's diplomatic efforts have been ramped up after British and EU negotiators reached "sufficient" agreement on the first phase of talks in mid-December.

The IRSG report, compiled by former minister Mark Hoban and law firm Hogan Lovells, proposes a managed divergence model that its authors believe will maintain the highest possible level of access after Brexit. Although it has been designed for financial services, it can be applied to a large number of professional services and other sectors.

Hoban is travelling around Europe to press the case, visiting Copenhagen today and Brussels next week, before trips to Portugal and Germany in the coming weeks.

Statement by Theresa May: : "Our proposal will create a UK-EU Free Trade Area which establishes a common rule book on industrial goods."

The Chequers Conclusion - MEMORANDUM

This memo is based on the press statement issued by the government about the conclusion of the Chequers Cabinet meeting on 6 July 2018, which lacks details in a number  of key areas. The government's proposals can only be fully assessed once their promised White Paper is published. However, some important conclusions can be drawn very clearly even on the basis of this limited information.

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I know how this story ends. So do you to judge by the number of eurotrib correspondents who have quit London.

< yawn >

Also, I've been reading Thucydides, History of the Peloponnesian War. Dude knows more about pirates than anyone alive. In US America.

Diversity is the key to economic and political evolution.

by Cat on Tue Jul 10th, 2018 at 11:38:24 AM EST


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