The economic consequences of Brexit (Vol 2)

[walm]

Well I am a pretty die-hard Remoaner but that was an excellent way to kick off the negotiations, IMHO.
Very surprisingly low on the waffle-o-meter for a politician.

[Mrr T]

B'stard Child said:

My reason to leave number 51

The people of Greece twice voted for the anti-austerity Syriza party and once voted in a national referendum to reject the EU bailout terms. The EU, in collaboration with the International Monetary Fund, ignored their votes and imposed its own onerous debt extension. That has kept the Greek economy crippled for years. Greece's only other option was to leave the eurozone and reinstate the drachma. This is not democracy, if your only choices are "do as we say or implode your economy with a risky currency switch."

I think you should cross that one off your list because it’s not true.

Basically the Greek people voted for it to be Christmas every day and Santa to deliver money to them every day.

The Troika and the IMF said making it Christmas every day was up to the church but they could say Santa did not exist.

Now I know it’s sad to tell a child there is no Santa but it has to be done eventually.

[pim]

The U.K is leaving that is a fact.

Out of the single market and maybe in some part of the customs union.A vote in the house of common or the lords won't make any difference.Unless there is a referendum again.

How it is going to affect jobs and our way of live I don't know.Maybe better in some parts and worse in others.I give Theresa her due she has followed the will of the majority out vote.Basically the U.K is given two fingers to the E.U and it is up to them how to deal with that.

[Digga]

walm said:

Well I am a pretty die-hard Remoaner but that was an excellent way to kick off the negotiations, IMHO.
Very surprisingly low on the waffle-o-meter for a politician.

I think that the demands to 'reveal all' before the negotiations now appear to be even less well-founded. The brevity, simplicity and delivery of the opening statement are key to the progress here.

[stongle]

Mrr T said:

I read your response to that post but did not have time to reply.

You seemed to be suggesting the BOE was looking to substantially increase the capital banks have to hold against risk.

I was not sure what you meant because last time I looked allocation of capital and capital requirements are set by the BIS and implemented in the EU by directive. You also seemed to be referring to new accounting standards on write down of loans. However, again these are set by the IASB and implemented in the EU via directive. Happy to listen to further explanation.

I would also question whether capital costs really matters to most of the financial services companies who use passporting to sell to EU clients. Capital costs only apply to banks so other financial service company, fund managers, rating agencies etc have no capital costs.

As for banks most are not bothered about selling loans to EU clients lending is mainly for the retail and small business sector. They do want to sell, execution services, issuance, custody, cash services, etc etc, all of which have very low capital requirements.

This is complelx and super nuanced, but Threat to the city is overblown – but its unfashionable to say it (here and there). I digress ( a lot of brevity is about to be used)…

I’m not suggesting, it’s a fact. BASEL is not the only capital regime in town.

IFRS9 requires that banks increase LLP Vs CET1 for non-performing loans (an immediate 12monthe expected loss for all loans). BoE want more or less immediate implementation, Eurozone wants to delay (simple screening of Leverage ratio tells you why). With UK still in the EU this is going to be an issue as the implementation and technical standards have to be set this year…

US banks have to comply with CECL which is even more punitive. Look up any table on CET1 / loss absorption buffer and an immediate picture can be drawn.

As to impact to other Financials, c’mon… Nothing works without liquidity and leverage (balance sheet injection). Prime Brokers are effectively providing the leverage for all those non-banks, and CERTAINLY they do apply to lending to corporates (and Solvency II has its own similar version). On calibration of Risk Weights for Corporates (where ratings do not exist); again the anglicised regulators went to implement higher credit impairment charges than the EU. Resolution rules compound this.

You think fund managers are going to run to Europe, really?

And the final points, largely an exit area for many banks (too high cost, but lets take them line by line) – leverage ratio in particular hits this (and whom are the big Global custodians….):

Execution Services – MiFIDII high cost transparency regime; similar to DFA (without Volcker) given the choice most would repeal
Issuance – Actually high capital costs if providing indemnity, subject to significant layers of regulation, PRIPPs etc
Custody – Very expensive, low return and no-one wants to be seen as a utility ask BoNY. FSB is going after indemnification so hitting lending activities (plus Tax harminisation has killed the holy cow of yield enhancement / tax arbitrage). + Blockchain
Trade Finance – see Blockchain
Cash Management see Blockchain

You’d need to increase bank service costs many many times – not exactly helpful when the ECB is doing QE, NIRP and possibly helicopter money.

The fact that R3 lost several G-SIBs whom have DLT / Blockchain patents tells you that it’s a disruptive technology coming very soon. It’s not a solution looking for a problem anymore – it’s a reality.

Finance doesn’t work on simple or linear rule setting (as passporting implies); but by far the biggest issue to the Eurozone is a the US Financial reforms and repeal of Volcker. Centre of gravity will move west.

[walm]

stongle said:

FSB is going after indemnification so hitting lending activities...

Those goddam commie bds.
Don't they know the cold war is over?

[B'stard Child]

Mrr T said:

B'stard Child said:

My reason to leave number 51

The people of Greece twice voted for the anti-austerity Syriza party and once voted in a national referendum to reject the EU bailout terms. The EU, in collaboration with the International Monetary Fund, ignored their votes and imposed its own onerous debt extension. That has kept the Greek economy crippled for years. Greece's only other option was to leave the eurozone and reinstate the drachma. This is not democracy, if your only choices are "do as we say or implode your economy with a risky currency switch."

I think you should cross that one off your list because it’s not true.

Basically the Greek people voted for it to be Christmas every day and Santa to deliver money to them every day.

The Troika and the IMF said making it Christmas every day was up to the church but they could say Santa did not exist.

Now I know it’s sad to tell a child there is no Santa but it has to be done eventually.

Dammit that's two reasons that have to be struck off my list

271 reasons to leave 53 posted so far - 2 "rejected" this one and "eurovision"

[Burwood]

FiF said:

Greg66 said:

FiF said:

Burwood said:

VolvoT5 said:

This speech makes it very clear that May wants a full/hard Brexit.... no fudge to please the remain voters...

She is saying she is fully prepared for a hard Brexit if the EU punish us. And in doing so will hurt the EU more than us.

That's how I read it, we are going to be prepared for possible eventualities, I'm not as negative about it as Richard North who has just said "We are totally fked."

Interesting that it appears to hold different meanings for different people. Perhaps deliberately unclear?

Yes, deliberately unclear. Although it does seem to be aiming for the dort a deal out in one hit approach, which I still think is not achievable in the time available.

May explicitly said she is not looking at a cliff edge approach. Rather, a transitional period and piece by piece approach. We have a lot to offer the EU

[paulrockliffe]

Daft question, but prompted by mention of Euro Clearing, access to capital and me having no knowledge of how all this works in practice:

If a lot of Euro *stuff* happens in London, does that mean that somewhere there are some computers that could be turned off in London that would cause merry hell for the Eurozone? As a sort of last-gasp-armageddon-stop-being-so-daft approach to negotiation.

[Tuna]

B'stard Child said:

Dammit that's two reasons that have to be struck off my list

271 reasons to leave 53 posted so far - 2 "rejected" this one and "eurovision"

Hmmmm... it remains the case that the Euro (and the absolute commitment to it) has been incredibly damaging to all of the southern nations. I've worked alongside Italians, Portuguese, Spaniards and Greeks who are all very clear that this particular part of the European project has hurt their countries - and was one of the main reasons they were all in the UK to find work. Whilst it's true Greece hasn't helped itself, the ECB has not found a solution to a systemic problem that it 'owns'.

Edited by Tuna on Tuesday 17th January 15:30

[Burwood]

paulrockliffe said:

Daft question, but prompted by mention of Euro Clearing, access to capital and me having no knowledge of how all this works in practice:

If a lot of Euro *stuff* happens in London, does that mean that somewhere there are some computers that could be turned off in London that would cause merry hell for the Eurozone? As a sort of last-gasp-armageddon-stop-being-so-daft approach to negotiation.

keeping it very simple. London is the 500b gorilla in certain products and services. Eg China RMB, emissions trading, various commodities and fx and no other city has as many 'banks' offering a myriad of products and services, funding etc. There could be an increased cost to outsiders in accessing that. No bank will up sticks and leave. The government will make sure of that via carrots.

[Burwood]

Watching Tim Farron literally frothing at the mouth was fantastic. Do these people actually listen to the st they spew? He wants a guarantee we stay in the single market. The bus has left the station leaving these irrelevant politicians behind. Then you have Corbyn who doesn't know what he wants, just that the Tory's are wrong.

[anonymous-user]

Burwood said:

. Then you have Corbyn who doesn't know what he wants, just that the Tory's are wrong.

Corbyn probably agrees with the policy of 'hard brexit', as do many of the old school left.

In fact, he probably agrees with this speech more than May does.

[powerstroke]

Burwood said:

Watching Tim Farron literally frothing at the mouth was fantastic. Do these people actually listen to the st they spew? He wants a guarantee we stay in the single market. The bus has left the station leaving these irrelevant politicians behind. Then you have Corbyn who doesn't know what he wants, just that the Tory's are wrong.

Will there ever be a day when these clots realise how far there heads have gone up their own arses ???

[stongle]

walm said:

Those goddam commie bds.
Don't they know the cold war is over?

Yup, you gotta wonder.... especially those at either vocal end of the spectrum!

Interesting article here, suggests (in line with my comments on "pull to the west") - that "if" the Eurozone and City of London get into a spat - both lose and NYC wins. Pretty logical really. Passporting is over done. I hate, hate, hate it as an argument as it cuts across business sense. Worth a read for anyone with an interest in the City:

http://www.thetradenews.com/Regulation/US-derivati...

[Burwood]

powerstroke said:

Burwood said:

Watching Tim Farron literally frothing at the mouth was fantastic. Do these people actually listen to the st they spew? He wants a guarantee we stay in the single market. The bus has left the station leaving these irrelevant politicians behind. Then you have Corbyn who doesn't know what he wants, just that the Tory's are wrong.

Will there ever be a day when these clots realise how far there heads have gone up their own arses ???

What is surprising is his comments show a complete lack of understanding of the issues. We are leaving the Single market (which has conditions attached by law such as freedom of movement etc) in exchange for something else which may mimic most of the benefits and very few of the negatives. But Tim Farron demands that retain access to the single market mechanism. Who votes for this cretin? Arrogant prick has no mandate so should sling his hook. Only air time he'll get this year. And apparently is outrageous we don't have TWO further referenda. Because the people must vote line by line on the deal. If the people are anything like Tim then they lack the brain power to understand 'the deal' and isn't that what politicians are for.

[WinstonWolf]

Burwood said:

powerstroke said:

Burwood said:

Watching Tim Farron literally frothing at the mouth was fantastic. Do these people actually listen to the st they spew? He wants a guarantee we stay in the single market. The bus has left the station leaving these irrelevant politicians behind. Then you have Corbyn who doesn't know what he wants, just that the Tory's are wrong.

Will there ever be a day when these clots realise how far there heads have gone up their own arses ???

What is surprising is his comments show a complete lack of understanding of the issues. We are leaving the Single market (which has conditions attached by law such as freedom of movement etc) in exchange for something else which may mimic most of the benefits and very few of the negatives. But Tim Farron demands that retain access to the single market mechanism. Who votes for this cretin? Arrogant prick has no mandate so should sling his hook. Only air time he'll get this year. And apparently is outrageous we don't have TWO further referenda. Because the people must vote line by line on the deal. If the people are anything like Tim then they lack the brain power to understand 'the deal' and isn't that what politicians are for.

I struggle to remember his name, he's of no consequence...

[B'stard Child]

Tuna said:

B'stard Child said:

Dammit that's two reasons that have to be struck off my list

271 reasons to leave 53 posted so far - 2 "rejected" this one and "eurovision"

Hmmmm... it remains the case that the Euro (and the absolute commitment to it) has been incredibly damaging to all of the southern nations. I've worked alongside Italians, Portuguese, Spaniards and Greeks who are all very clear that this particular part of the European project has hurt their countries - and was one of the main reasons they were all in the UK to find work. Whilst it's true Greece hasn't helped itself, the ECB has not found a solution to a systemic problem that it 'owns'.

Edited by Tuna on Tuesday 17th January 15:30

Nicely put

M2pW - If the "EU" (and I include the Euro & "four freedoms" in that) is such a "force for good" and a "must have" then it should work for "all" - my feelings are it works for those states it works for and bailouts, handouts and contributions are the "absolution of guilt" for the failure by the states where it is working for them. This doesn't sit well with me at all, Not a fan of Tony Benn but he had the EU pegged for what they are and that was in 1991 (RTL#53) it's taken a while for the country to wake up IMO.

First point - I had several reasons to leave around the economies of the southern states of Europe

Reasons to leave numbers 54 & 55

54. Youth unemployment in the southern states - I was told it's nothing to do with the EU or the Euro that may be true - what I don't see is an effort to resolve it.

55. Unemployment in the southern states full stop - see above comments





PS #51 (above) and #8 (Eurovision) are both still on my list and Mrr T knows that

[walm]

B'stard Child said:

If the "EU" (and I include the Euro & "four freedoms" in that) is such a "force for good" and a "must have" then it should work for "all"...

Isn't that an unrealistic expectation for... well... pretty much anything?

Certainly doesn't work for democracy, just ask any Remoaner!

[powerstroke]

Burwood said:

powerstroke said:

Burwood said:

Watching Tim Farron literally frothing at the mouth was fantastic. Do these people actually listen to the st they spew? He wants a guarantee we stay in the single market. The bus has left the station leaving these irrelevant politicians behind. Then you have Corbyn who doesn't know what he wants, just that the Tory's are wrong.

Will there ever be a day when these clots realise how far there heads have gone up their own arses ???

What is surprising is his comments show a complete lack of understanding of the issues. We are leaving the Single market (which has conditions attached by law such as freedom of movement etc) in exchange for something else which may mimic most of the benefits and very few of the negatives. But Tim Farron demands that retain access to the single market mechanism. Who votes for this cretin? Arrogant prick has no mandate so should sling his hook. Only air time he'll get this year. And apparently is outrageous we don't have TWO further referenda. Because the people must vote line by line on the deal. If the people are anything like Tim then they lack the brain power to understand 'the deal' and isn't that what politicians are for.

People hear what they want to hear and Farron ,clegg etc speak for the hard of thinking lefty types .....