Bloomberg: investment banks to begin moving jobs following Art 50

Kohoutek

http://www.bloomberg.com/news/articles/2016-08-15/banks-won-t-wait-around-to-see-what-brexit-deal-the-u-k-can-get

Big investment banks with their European headquarters in London will start the process of moving jobs from the U.K. within weeks of the government triggering Brexit, a faster time line than their public messages of patience would imply, according to people briefed on the plans being drawn up by four of the biggest firms.

Dismayed by the lack of a clear plan to protect the U.K.’s status as a global financial hub, executives are planning for the worst -- that they will lose the right to sell services freely around the European Union from the City, said the people, who asked not to be identified because the plans are private. Facing a long process with potential waits for regulatory approvals before workers can pack their bags, banks want to start quickly in order to have new or expanded offices set up in Europe before the end of the two-year Brexit negotiation period.

"This year is all about understanding potential scenarios, your options, and what your contingency plans are," said Andrew Gray, head of Brexit for U.K. financial services at PwC, which is advising banks on how best to respond to Brexit. "Some plans will take time to execute, and firms can’t afford to wait until Jan. 1, 2019, and risk not being able to do business."

While U.K. Prime Minister Theresa May has said she will fight for the City of London to retain its passporting rights, bankers and lawyers say she faces an uphill battle trying to win concessions from EU partners still smarting from the outcome of the June 23 vote. Bank executives are privately discouraged that seven weeks after the referendum, the ministers in charge of negotiating the best deal for the U.K. believe they can retain the benefits of being in the single market without accepting the free movement of EU citizens, the people said.

mayonnaise

Yeah but we're getting lots of medals in Rio, you know.

System

London is the number one home for dirty banking (derivatives).

Masomnia

I think it will be very interesting to see how this pans out.

The deal we get will play a part, and may be a push factor once article 50 is triggered, but the EU is hardly banker friendly. The financial transactions tax which is soon to be implemented and the regulations regarding bonuses don't make for a business friendly environment. Those things aren't going anywhere, and if anything there will be only more regulation of that nature.

A_Medium_Size_Jock

Hmm ........... begs the question then why Deutsche Boerse's shareholders are so keen to merge with the LSE - above 89% in favour shows that THEY do not believe the future to be a great problem.
No point in a stock exchange with no business to exchange, is there?
Why buy a business that is supposedly doomed ?

http://www.telegraph.co.uk/business/2016/08/17/london-stock-exchange-merger-now-heads-to-the-regulators-as-deut/

Conrad

The usual play to get more QE free money, less regulation etc. Seen it several times such as when we declined the Euro and when the Swiss declined to join the EU, yawn

The city is like an ant world of decades old networking where each ant uses that networking to extract information and intelligence to occasionally win out big time. You just can't up stick to Frankfurt and carry on as you were with no network of contacts.

AFF8879

I can tell you first hand this is a total overreaction. Some jobs would undoubtedly move, but the biggest impact would be upon banks' legal entity restructuring as opposed to job moves.

The cost of moving operations of this size/complexity is on a par with the tariffs that would be otherwise paid....secondly, Londons talent pool simply cannot be replicated instantly in any other European city, this would take decades....

London will remain the financial centre of Europe.

Kohoutek

AFF8879 wrote: »

I can tell you first hand this is a total overreaction. Some jobs would undoubtedly move, but the biggest impact would be upon banks' legal entity restructuring as opposed to job moves.

The cost of moving operations of this size/complexity is on a par with the tariffs that would be otherwise paid....secondly, Londons talent pool simply cannot be replicated instantly in any other European city, this would take decades....

London will remain the financial centre of Europe.

Sorry, you clearly don't have first hand knowledge judging by your reference to tariffs. There are no tariffs on financial services; the issue is market access, not tariffs.

Kohoutek

Conrad wrote: »

The usual play to get more QE free money, less regulation etc. Seen it several times such as when we declined the Euro and when the Swiss declined to join the EU, yawn

The city is like an ant world of decades old networking where each ant uses that networking to extract information and intelligence to occasionally win out big time. You just can't up stick to Frankfurt and carry on as you were with no network of contacts.

Oh dear, you are very naive.

The issue is that if we don't retain passporting, the banks cannot serve their clients in the EU. That is a very material business issue.

See leaked Deutsche bank board briefing if you don't believe me:

mwpt

AFF8879 wrote: »

I can tell you first hand this is a total overreaction. Some jobs would undoubtedly move, but the biggest impact would be upon banks' legal entity restructuring as opposed to job moves.

The cost of moving operations of this size/complexity is on a par with the tariffs that would be otherwise paid....secondly, Londons talent pool simply cannot be replicated instantly in any other European city, this would take decades....

London's talent pool is here for a reason, it didn't produce that talent all on it's own.

I don't know how it'll turn out because there doesn't seem to be a plan on what outside of the EU will look like, so maybe it'll be fine, maybe it won't. I've worked in and around the fintech industry for the last 14 years, in London, but I'm no expert on population movements, foreign currency mechanisms, trade agreements, and so forth. It appears I'm at a large disadvantage on these forums which are rife with experts.

Masomnia

I work in HR for a global bank, and doing a restructuring in the UK is a huge undertaking, nevermind across Europe. If they don't have to do it they won't.

So passporting is a factor, but with the Swiss and the US doing it without membership of the single market I don't see why we can't come to some agreement.