Could or should the city be sacrificed for good brexit deal??

[Mr Whippy]

Greg66 said:

to replace what the City contributes

But the city needs a working economy where enterprise thrives, to make their cut.

Otherwise how are they making wealth?

The City doesn't exist in isolation. It's position can be justified if the market is there to sustain it.

The problem I see is the market isn't there to sustain it, it's currently subsidised by society to remain as large as it is.

Socialist banking at it's best.


Unless they're making money out of nothing... but how sustainable is that?

[RYH64E]

Mr Whippy said:

But the city needs a working economy where enterprise thrives, to make their cut.

Otherwise how are they making wealth?

The City doesn't exist in isolation. It's position can be justified if the market is there to sustain it.

The problem I see is the market isn't there to sustain it, it's currently subsidised by society to remain as large as it is.

Socialist banking at it's best.


Unless they're making money out of nothing... but how sustainable is that?

The market is there, unfortunately it's an EU market and it looks like the banks are going to have to be based in the EU to have full access to it. That's one of the key reasons they're here in the first place, we're a convenient base from which to service the EU market.

[Mr Whippy]

RYH64E said:

Mr Whippy said:

But the city needs a working economy where enterprise thrives, to make their cut.

Otherwise how are they making wealth?

The City doesn't exist in isolation. It's position can be justified if the market is there to sustain it.

The problem I see is the market isn't there to sustain it, it's currently subsidised by society to remain as large as it is.

Socialist banking at it's best.


Unless they're making money out of nothing... but how sustainable is that?

The market is there, unfortunately it's an EU market and it looks like the banks are going to have to be based in the EU to have full access to it. That's one of the key reasons they're here in the first place, we're a convenient base from which to service the EU market.

So it was here because it was cheap and less risky to be here?

So they'll be worse off in the EU? Hence the desire to not leave the UK?


In the EU will there be essentially less privatised profit, and no socialised losses?

Dave

[RYH64E]

Mr Whippy said:

So it was here because it was cheap and less risky to be here?

So they'll be worse off in the EU? Hence the desire to not leave the UK?


In the EU will there be essentially less privatised profit, and no socialised losses?

Dave

My understanding is that they were here for a whole load of reasons of which passporting was key, take that away and the other reasons will remain, but I doubt they would be sufficient to compensate for restricted access to the EU markets. Whatever the reason, anything that adversely affects financial services will cost this country money, it's been one of the UK's success stories, employs a lot of highly paid people and pays a lot of much needed tax.

[ATG]

Mr Whippy said:

So it was here because it was cheap and less risky to be here?

So they'll be worse off in the EU? Hence the desire to not leave the UK?


In the EU will there be essentially less privatised profit, and no socialised losses?

Dave

Hard to follow what you're trying to say. They are here in large part because the clients feel confident dealing with UK regulated entities and using English and Welsh law for contracts. It is not because the UK is financial bandit country. It's the exact opposite. The risk is that the EU will decide to insist that key euro-denominated financial activity must take place within the EU. That will force financial institutions to relocate some bits of their operations within the EU. The motivations to stay or go have nothing to do with "privatised profit" whatever that is supposed to mean or "socialised losses" or London being "cheap and easy".

[Mr Whippy]

RYH64E said:

Mr Whippy said:

So it was here because it was cheap and less risky to be here?

So they'll be worse off in the EU? Hence the desire to not leave the UK?


In the EU will there be essentially less privatised profit, and no socialised losses?

Dave

My understanding is that they were here for a whole load of reasons of which passporting was key, take that away and the other reasons will remain, but I doubt they would be sufficient to compensate for restricted access to the EU markets. Whatever the reason, anything that adversely affects financial services will cost this country money, it's been one of the UK's success stories, employs a lot of highly paid people and pays a lot of much needed tax.

I'm ultimately confused where the money generated comes from.

I assume it's because the City does trade around the world, so they can skim wealth from a global market of financial services...

But if that is the case, then is the EU a significant volume of that trade?

And how can it be when the Euro is doing so badly and has banks failing or teetering on the edge of oblivion?

Dave

[Mr Whippy]

ATG said:

Mr Whippy said:

So it was here because it was cheap and less risky to be here?

So they'll be worse off in the EU? Hence the desire to not leave the UK?


In the EU will there be essentially less privatised profit, and no socialised losses?

Dave

Hard to follow what you're trying to say. They are here in large part because the clients feel confident dealing with UK regulated entities and using English and Welsh law for contracts. It is not because the UK is financial bandit country. It's the exact opposite. The risk is that the EU will decide to insist that key euro-denominated financial activity must take place within the EU. That will force financial institutions to relocate some bits of their operations within the EU. The motivations to stay or go have nothing to do with "privatised profit" whatever that is supposed to mean or "socialised losses" or London being "cheap and easy".

So they're here for the laws, which won't change.

If they have to relocate some parts of the business to the EU then is that costly and difficult? Ie, the opposite of cheap and easy?


Socialised losses means bail outs from government. I was aware that the EU has altered bank bail out policy so bail ins are now the favoured option (yet to be seen, maybe DB will be an interesting acid test?)

[Zod]

Mr Whippy said:

ATG said:

Mr Whippy said:

So it was here because it was cheap and less risky to be here?

So they'll be worse off in the EU? Hence the desire to not leave the UK?


In the EU will there be essentially less privatised profit, and no socialised losses?

Dave

Hard to follow what you're trying to say. They are here in large part because the clients feel confident dealing with UK regulated entities and using English and Welsh law for contracts. It is not because the UK is financial bandit country. It's the exact opposite. The risk is that the EU will decide to insist that key euro-denominated financial activity must take place within the EU. That will force financial institutions to relocate some bits of their operations within the EU. The motivations to stay or go have nothing to do with "privatised profit" whatever that is supposed to mean or "socialised losses" or London being "cheap and easy".

So they're here for the laws, which won't change.

If they have to relocate some parts of the business to the EU then is that costly and difficult? Ie, the opposite of cheap and easy?


Socialised losses means bail outs from government. I was aware that the EU has altered bank bail out policy so bail ins are now the favoured option (yet to be seen, maybe DB will be an interesting acid test?)

I hope you are aware that it wasn't the City that was bailed out, but RBS, Lloyds/HBOS, Northern Rock and Bradford & Bingley.

The City does not exist as a parasite on the rest of the UK. It is a massive exporter of services, both to the EU, where loss of passporting rights is a risk and to the rest of the world.

[RYH64E]

Mr Whippy said:

I'm ultimately confused where the money generated comes from.

You don't have to know where the money comes from it's where it goes that's important, and a lot of it goes to HMRC.

[Mr Whippy]

Zod said:

Mr Whippy said:

ATG said:

Mr Whippy said:

So it was here because it was cheap and less risky to be here?

So they'll be worse off in the EU? Hence the desire to not leave the UK?


In the EU will there be essentially less privatised profit, and no socialised losses?

Dave

Hard to follow what you're trying to say. They are here in large part because the clients feel confident dealing with UK regulated entities and using English and Welsh law for contracts. It is not because the UK is financial bandit country. It's the exact opposite. The risk is that the EU will decide to insist that key euro-denominated financial activity must take place within the EU. That will force financial institutions to relocate some bits of their operations within the EU. The motivations to stay or go have nothing to do with "privatised profit" whatever that is supposed to mean or "socialised losses" or London being "cheap and easy".

So they're here for the laws, which won't change.

If they have to relocate some parts of the business to the EU then is that costly and difficult? Ie, the opposite of cheap and easy?


Socialised losses means bail outs from government. I was aware that the EU has altered bank bail out policy so bail ins are now the favoured option (yet to be seen, maybe DB will be an interesting acid test?)

I hope you are aware that it wasn't the City that was bailed out, but RBS, Lloyds/HBOS, Northern Rock and Bradford & Bingley.

The City does not exist as a parasite on the rest of the UK. It is a massive exporter of services, both to the EU, where loss of passporting rights is a risk and to the rest of the world.

I know the City consists of many different types of financial businesses.

I know it exports a lot of services globally.

Does the EU proportion weigh significantly enough to mean an exodus from the City?

As for the bailed out banks, I think the problem is no one knows how much banks offer the City in both tax revenue and risk.

It'd be nice to see high street banking and investment banking split somehow so we can clearly see the proceeds and risks, and decide what we want to keep and what we are not so bothered about.

But to just bundle the entire 'City' together as one and say it'll go or stay seems very simplified.

There are clearly good bits and bad bits, and bits that bring in lots of tax revenue and bits that don't.

Dave

[Mr Whippy]

RYH64E said:

Mr Whippy said:

I'm ultimately confused where the money generated comes from.

You don't have to know where the money comes from it's where it goes that's important, and a lot of it goes to HMRC.

But if that money may have ended up with HMRC by another route then where it comes from is relevant.

I think for the argument to have merit then some clear numbers need to be presented to show exactly what will happen if financial institution X does Y after Brexit.

HSBC have already said they'd leave the UK if the UK leaves the EU, and I told them I'd leave HSBC if they do and move to a UK based bank. At least a small part of the revenue HSBC 'think' they'd retain wouldn't be taken away from the UK tax system in that case.

Dave

[ATG]

Mr Whippy said:

I'm ultimately confused where the money generated comes from.

I assume it's because the City does trade around the world, so they can skim wealth from a global market of financial services...

But if that is the case, then is the EU a significant volume of that trade?

And how can it be when the Euro is doing so badly and has banks failing or teetering on the edge of oblivion?

Dave

Yeah, a huge chunk of the City's clients are in the EU. The EU's economy is roughly 25% of the entire world's economy. The idea that the EU is economically crippled is wildly exaggerated. Growth is sluggish, some of their banks are in trouble, some of the EU member states' national finances are basket cases. But that subtracts a few percent off their economic output. It's still a HUGE economy.

By the way, the City doesn't "skim wealth" any more than your newsagent skims your wealth when you buy a newspaper. Clients pay banks, insurers, lawyers and accountants to provide the services they need to run their businesses. There is cut throat competition to provide those services. There is a wholly fallacious idea that the City makes money by gambling and ripping off its clients. Oddly enough that isn't a sustainable business model. You make money by selling people the goods and services that they've decided that they need.

[RYH64E]

Mr Whippy said:

But if that money may have ended up with HMRC by another route then where it comes from is relevant.

I think for the argument to have merit then some clear numbers need to be presented to show exactly what will happen if financial institution X does Y after Brexit.

HSBC have already said they'd leave the UK if the UK leaves the EU, and I told them I'd leave HSBC if they do and move to a UK based bank. At least a small part of the revenue HSBC 'think' they'd retain wouldn't be taken away from the UK tax system in that case.

Dave

Unless you run an overdraft or pay punitive account fees HSBC would probably save money if you moved your account elsewhere, personal banking isn't profitable for the High Street banks and isn't really part of this debate.

[sidicks]

Mr Whippy said:

It'd be nice to see high street banking and investment banking split somehow so we can clearly see the proceeds and risks, and decide what we want to keep and what we are not so bothered about.

Which banks are considered the 'risky' ones?
Which banks were bailed out?

[ATG]

Dave, you're asking a lot of entirely reasonable questions given a position of entirely understandably limited knowledge, but they do seem to be overlaid with some preconceived notions that there's evil lurking out there somewhere.

[SidewaysSi]

ATG said:

Dave, you're asking a lot of entirely reasonable questions given a position of entirely understandably limited knowledge, but they do seem to be overlaid with some preconceived notions that there's evil lurking out there somewhere.

London and the city arw evil don't you know? They take our money, earn too much, dodge taxes etc. Don't need the fkers. Exit the EU. I could do a lot better etc.

The anti-city and anti-London feeling on PH is laughable.

[Mr Whippy]

ATG said:

Dave, you're asking a lot of entirely reasonable questions given a position of entirely understandably limited knowledge, but they do seem to be overlaid with some preconceived notions that there's evil lurking out there somewhere.

It's not preconceived notions of evil, it's just a critical standpoint.

They're a business just like any other, they manage all my wealth. I can't accumulate or store wealth without using their system. They have somewhat of a monopoly.
If I tried to use all cash then government think I'm a terrorist or a tax avoider/evader, or something else unsavoury.

It's reasonable to be critical of banks motives rather than just assuming they do everything in my own best interests.

[Mr Whippy]

sidicks said:

Mr Whippy said:

It'd be nice to see high street banking and investment banking split somehow so we can clearly see the proceeds and risks, and decide what we want to keep and what we are not so bothered about.

Which banks are considered the 'risky' ones?
Which banks were bailed out?

All banks are risky, fractional reserve banking sees to that.

Beyond that, ask the governor of the Bank of England. Didn't he add liquidity to the financial system on Brexit result day for a reason? Who accesses the funds he made available? Banks?

I'm not sure what banks were bailed out, how, or why. I do know that free market economics doesn't apply to them though. That means society's wealth, one way or another, is being used to support them.

Dave

[sidicks]

Mr Whippy said:

All banks are risky, fractional reserve banking sees to that.

All business are risky - not sure of your point?

Mr Whippy said:

Beyond that, ask the governor of the Bank of England. Didn't he add liquidity to the financial system on Brexit result day for a reason? Who accesses the funds he made available? Banks?

I'm not sure what banks were bailed out, how, or why.. I do know that free market economics doesn't apply to them though. That means society's wealth, one way or another, is being used to support them.

Dave

For someone that doesn't appear to understand the first thing about banks, you seem to have strong opinions on what should happen with them...

[RYH64E]

Mr Whippy said:

It's not preconceived notions of evil, it's just a critical standpoint.

They're a business just like any other, they manage all my wealth. I can't accumulate or store wealth without using their system. They have somewhat of a monopoly.
If I tried to use all cash then government think I'm a terrorist or a tax avoider/evader, or something else unsavoury.

It's reasonable to be critical of banks motives rather than just assuming they do everything in my own best interests.

I might be wrong, but it appears to me that what you think of as 'The Banks' isn't the part of financial services that makes money, nor is it the part that's under threat if/when we leave the EU.