How do we think EU negotiations will go? (Vol 13)
Discussion
soupdragon1 said:
On the news in NI this morning….
Simon Hoare MP was on Radio Ulster this morning and gave a surprisingly open interview, and in some respects, insights into the type of conversations that were going on being Tory closed doors.
Much has been said (certainly here across the Irish Sea) about Congress in USA only approving a post Brexit UK trade deal as long as there in no land border in Ireland. Land border goes up – down goes a UK trade deal. Simon Hoare came out and said it in black and white this morning that the post Brexit vision is trade deals with the like of America, and that an Irish Land Border is a blocker, so the Tories are absolutely lined up with the EU in that respect. That’s contrary to what some have been led to believe, that the EU is using GFA as leverage against the UK – EU and UK are actually on the same page here – you could maybe say that’s its actually the USA that are influencing the UK to take that position, rather than the EU.
DUP have been saying that it’s the EU/ROI/Varadkar using leverage against NI but Simon Hoare has confirmed that the USA are another key stakeholder in this situation.
And as if the DUP humiliation at being ceremoniously dumped by the Tories isn’t enough, Simon Hoare put the boot in once again this morning, by saying that the DUP have yet to provide workable alternatives – they just keep saying they don’t like it with no real plan of what else can be done.
He went on to say that while he recognises the additional paperwork concerns for NI business, there is an offset to that in fact that having a unique deal where we have a foot in both camps and can have relatively frictionless trade with both UK and EU – ie, when weighing up the pro’s and con’s – the Tories firmly believe they have won a good compromise for NI, despite the DUP objections.
In summary – in terms of the overall picture for Brexit, UK, NI, EU, ROW – DUP had a voice, but the Tories have now decided quite clearly that they are carrying on without them.
And if all of the above isn’t a massive kick in the teeth for the DUP, there are underlying rumours that there are further kicks coming the DUP’s directions if they start opposing the Tory Govt (eg, by lending support to adjusting Johnsons WA to include a CU) then the Govt could ‘threaten’ the DUP with an Irish Language Act in NI.
Just this week, the absence of Stormont has resulted in GB abortion/Gay marriage legislation being introduced in NI (DUP strongly oppose both as well as large sections of their electorate) so after that big kick in the teeth – to see it followed up with an Irish Language Act being introduced would be a massive kick in the teeth.
The DUP have went from holding a position of power in the Tory Govt to ground zero…and quite possibly, a complete reversal where they are staring down the barrel of a Tory party who will stop at nothing to get their way.
I haven’t added my opinion to any of this yet, but it appears the Tories are getting quite aggressive in their strategy. Not only did they throw the DUP under the bus – it appears they are going to block off all the roads to ensure the emergency services are unable to reach them. Make of that what you will.
Interesting, thanks. Simon Hoare MP was on Radio Ulster this morning and gave a surprisingly open interview, and in some respects, insights into the type of conversations that were going on being Tory closed doors.
Much has been said (certainly here across the Irish Sea) about Congress in USA only approving a post Brexit UK trade deal as long as there in no land border in Ireland. Land border goes up – down goes a UK trade deal. Simon Hoare came out and said it in black and white this morning that the post Brexit vision is trade deals with the like of America, and that an Irish Land Border is a blocker, so the Tories are absolutely lined up with the EU in that respect. That’s contrary to what some have been led to believe, that the EU is using GFA as leverage against the UK – EU and UK are actually on the same page here – you could maybe say that’s its actually the USA that are influencing the UK to take that position, rather than the EU.
DUP have been saying that it’s the EU/ROI/Varadkar using leverage against NI but Simon Hoare has confirmed that the USA are another key stakeholder in this situation.
And as if the DUP humiliation at being ceremoniously dumped by the Tories isn’t enough, Simon Hoare put the boot in once again this morning, by saying that the DUP have yet to provide workable alternatives – they just keep saying they don’t like it with no real plan of what else can be done.
He went on to say that while he recognises the additional paperwork concerns for NI business, there is an offset to that in fact that having a unique deal where we have a foot in both camps and can have relatively frictionless trade with both UK and EU – ie, when weighing up the pro’s and con’s – the Tories firmly believe they have won a good compromise for NI, despite the DUP objections.
In summary – in terms of the overall picture for Brexit, UK, NI, EU, ROW – DUP had a voice, but the Tories have now decided quite clearly that they are carrying on without them.
And if all of the above isn’t a massive kick in the teeth for the DUP, there are underlying rumours that there are further kicks coming the DUP’s directions if they start opposing the Tory Govt (eg, by lending support to adjusting Johnsons WA to include a CU) then the Govt could ‘threaten’ the DUP with an Irish Language Act in NI.
Just this week, the absence of Stormont has resulted in GB abortion/Gay marriage legislation being introduced in NI (DUP strongly oppose both as well as large sections of their electorate) so after that big kick in the teeth – to see it followed up with an Irish Language Act being introduced would be a massive kick in the teeth.
The DUP have went from holding a position of power in the Tory Govt to ground zero…and quite possibly, a complete reversal where they are staring down the barrel of a Tory party who will stop at nothing to get their way.
I haven’t added my opinion to any of this yet, but it appears the Tories are getting quite aggressive in their strategy. Not only did they throw the DUP under the bus – it appears they are going to block off all the roads to ensure the emergency services are unable to reach them. Make of that what you will.
For me, the smartest thing Johnson did was create the conditions for internal rebellion, so he could withdraw the whip and instantly defang the DUP.
Stay in Bed Instead said:
JNW1 said:
I'm not; in the eyes of many the EU can do no wrong and anything that suggests the project is in anything other than fine fettle is pushing an equivalent of Project Fear as far as they're concerned. If someone has misgivings about the way the EU and their project are going - and voted Leave as a consequence - they're dismissed as a deluded racist with an IQ barely into double figures....
Likewise in the eyes of many the EU can do no right.However, none of that alters the fact there are some significant systemic problems within the EU and the Eurozone and I haven't seen much evidence of anyone on the Remain side being prepared to acknowledge that - all we get is how the EU is an economic safe haven which we'd be crazy to leave. Heads firmly in the sand IMO...
soupdragon1 said:
Much has been said (certainly here across the Irish Sea) about Congress in USA only approving a post Brexit UK trade deal as long as there in no land border in Ireland. Land border goes up – down goes a UK trade deal. Simon Hoare came out and said it in black and white this morning that the post Brexit vision is trade deals with the like of America, and that an Irish Land Border is a blocker, so the Tories are absolutely lined up with the EU in that respect. That’s contrary to what some have been led to believe, that the EU is using GFA as leverage against the UK – EU and UK are actually on the same page here – you could maybe say that’s its actually the USA that are influencing the UK to take that position, rather than the EU.
DUP have been saying that it’s the EU/ROI/Varadkar using leverage against NI but Simon Hoare has confirmed that the USA are another key stakeholder in this situation.
I think the picture is somewhat more nuanced than that. Throughout the western world similar debates go on but the issues change.DUP have been saying that it’s the EU/ROI/Varadkar using leverage against NI but Simon Hoare has confirmed that the USA are another key stakeholder in this situation.
The party of the globalists in the USA are the Democrats so inevitably they are very much opposed to Brexit. They are most likely using the issue of the Irish border to try and raise doubts over a FTA with the USA post Brexit. Whether these doubts are real and/or they would use another pretext if that one is taken away remains to be seen.
If anyone doubts how fervently a branch of American opinion is opposed to Brexit they just need to take a look at some of the coverage in the New York Times.
!Digga said:
Mrr T said:
Are you suggestion on leaving the UK will not adopt Basle 4?
Without presuming to speak for Stongle, my own take is rather that EU banks are far worse prepared for the new regulations - they are already in a very embattled position and the changes are hardly likely to increase their propensity to lend, which therefore does not bode well for Eurozone economic growth.BASLE 4 just makes internal models much more expensive.
Where I disagree with Strongle is on the importance of bank lending on RWA in a modern economy. It matters for some retail lending but look at house prices across the EU compared to the UK and you will see mortgages are much less important.
As for wholesale lending most companies minimise this because its expensive. It tends only to be needed in take overs. I expect to see RAPIDS in the EU, including the UK, soon. Surprising its not happened sooner.
ClaphamGT3 said:
JNW1 said:
Blackpuddin said:
Quite surprised more isn't being made of the fact that the EU has sent warning letters to France, Italy, Spain, Belgium, Portugal and Finland about their planned budgets for 2020. The project is on its last legs.
I'm not; in the eyes of many the EU can do no wrong and anything that suggests the project is in anything other than fine fettle is pushing an equivalent of Project Fear as far as they're concerned. If someone has misgivings about the way the EU and their project are going - and voted Leave as a consequence - they're dismissed as a deluded racist with an IQ barely into double figures....It is perfectly possible to support something on balance whilst being perfectly aware of its faults.
Sway said:
soupdragon1 said:
On the news in NI this morning….
Simon Hoare MP was on Radio Ulster this morning and gave a surprisingly open interview, and in some respects, insights into the type of conversations that were going on being Tory closed doors.
Much has been said (certainly here across the Irish Sea) about Congress in USA only approving a post Brexit UK trade deal as long as there in no land border in Ireland. Land border goes up – down goes a UK trade deal. Simon Hoare came out and said it in black and white this morning that the post Brexit vision is trade deals with the like of America, and that an Irish Land Border is a blocker, so the Tories are absolutely lined up with the EU in that respect. That’s contrary to what some have been led to believe, that the EU is using GFA as leverage against the UK – EU and UK are actually on the same page here – you could maybe say that’s its actually the USA that are influencing the UK to take that position, rather than the EU.
DUP have been saying that it’s the EU/ROI/Varadkar using leverage against NI but Simon Hoare has confirmed that the USA are another key stakeholder in this situation.
And as if the DUP humiliation at being ceremoniously dumped by the Tories isn’t enough, Simon Hoare put the boot in once again this morning, by saying that the DUP have yet to provide workable alternatives – they just keep saying they don’t like it with no real plan of what else can be done.
He went on to say that while he recognises the additional paperwork concerns for NI business, there is an offset to that in fact that having a unique deal where we have a foot in both camps and can have relatively frictionless trade with both UK and EU – ie, when weighing up the pro’s and con’s – the Tories firmly believe they have won a good compromise for NI, despite the DUP objections.
In summary – in terms of the overall picture for Brexit, UK, NI, EU, ROW – DUP had a voice, but the Tories have now decided quite clearly that they are carrying on without them.
And if all of the above isn’t a massive kick in the teeth for the DUP, there are underlying rumours that there are further kicks coming the DUP’s directions if they start opposing the Tory Govt (eg, by lending support to adjusting Johnsons WA to include a CU) then the Govt could ‘threaten’ the DUP with an Irish Language Act in NI.
Just this week, the absence of Stormont has resulted in GB abortion/Gay marriage legislation being introduced in NI (DUP strongly oppose both as well as large sections of their electorate) so after that big kick in the teeth – to see it followed up with an Irish Language Act being introduced would be a massive kick in the teeth.
The DUP have went from holding a position of power in the Tory Govt to ground zero…and quite possibly, a complete reversal where they are staring down the barrel of a Tory party who will stop at nothing to get their way.
I haven’t added my opinion to any of this yet, but it appears the Tories are getting quite aggressive in their strategy. Not only did they throw the DUP under the bus – it appears they are going to block off all the roads to ensure the emergency services are unable to reach them. Make of that what you will.
Interesting, thanks. Simon Hoare MP was on Radio Ulster this morning and gave a surprisingly open interview, and in some respects, insights into the type of conversations that were going on being Tory closed doors.
Much has been said (certainly here across the Irish Sea) about Congress in USA only approving a post Brexit UK trade deal as long as there in no land border in Ireland. Land border goes up – down goes a UK trade deal. Simon Hoare came out and said it in black and white this morning that the post Brexit vision is trade deals with the like of America, and that an Irish Land Border is a blocker, so the Tories are absolutely lined up with the EU in that respect. That’s contrary to what some have been led to believe, that the EU is using GFA as leverage against the UK – EU and UK are actually on the same page here – you could maybe say that’s its actually the USA that are influencing the UK to take that position, rather than the EU.
DUP have been saying that it’s the EU/ROI/Varadkar using leverage against NI but Simon Hoare has confirmed that the USA are another key stakeholder in this situation.
And as if the DUP humiliation at being ceremoniously dumped by the Tories isn’t enough, Simon Hoare put the boot in once again this morning, by saying that the DUP have yet to provide workable alternatives – they just keep saying they don’t like it with no real plan of what else can be done.
He went on to say that while he recognises the additional paperwork concerns for NI business, there is an offset to that in fact that having a unique deal where we have a foot in both camps and can have relatively frictionless trade with both UK and EU – ie, when weighing up the pro’s and con’s – the Tories firmly believe they have won a good compromise for NI, despite the DUP objections.
In summary – in terms of the overall picture for Brexit, UK, NI, EU, ROW – DUP had a voice, but the Tories have now decided quite clearly that they are carrying on without them.
And if all of the above isn’t a massive kick in the teeth for the DUP, there are underlying rumours that there are further kicks coming the DUP’s directions if they start opposing the Tory Govt (eg, by lending support to adjusting Johnsons WA to include a CU) then the Govt could ‘threaten’ the DUP with an Irish Language Act in NI.
Just this week, the absence of Stormont has resulted in GB abortion/Gay marriage legislation being introduced in NI (DUP strongly oppose both as well as large sections of their electorate) so after that big kick in the teeth – to see it followed up with an Irish Language Act being introduced would be a massive kick in the teeth.
The DUP have went from holding a position of power in the Tory Govt to ground zero…and quite possibly, a complete reversal where they are staring down the barrel of a Tory party who will stop at nothing to get their way.
I haven’t added my opinion to any of this yet, but it appears the Tories are getting quite aggressive in their strategy. Not only did they throw the DUP under the bus – it appears they are going to block off all the roads to ensure the emergency services are unable to reach them. Make of that what you will.
For me, the smartest thing Johnson did was create the conditions for internal rebellion, so he could withdraw the whip and instantly defang the DUP.
Good to see the bigger picture being put out there and showing the DUP for what they are
I think the deal has the potential to work very well in favour of NI with it being in both camps
Only this week we’ve seen nearly a thousand well paid jobs lost in the South as high tech multinationals pull out
NI being in a position to offer both markets could play very well for internal investment
I wish that NI Politicians in general could look beyond their own navels
JagLover said:
.......................The party of the globalists in the USA are the Democrats so inevitably they are very much opposed to Brexit. They are most likely using the issue of the Irish border to try and raise doubts over a FTA with the USA post Brexit. Whether these doubts are real and/or they would use another pretext if that one is taken away remains to be seen.
.......................................................
So being globalists they don't want an FTA?.......................................................
Dr Jekyll said:
JagLover said:
.......................The party of the globalists in the USA are the Democrats so inevitably they are very much opposed to Brexit. They are most likely using the issue of the Irish border to try and raise doubts over a FTA with the USA post Brexit. Whether these doubts are real and/or they would use another pretext if that one is taken away remains to be seen.
.......................................................
So being globalists they don't want an FTA?.......................................................
Mrr T said:
Thanks I understand now.
1. BASLE 4 just makes internal models much more expensive.
2. Where I disagree with Strongle is on the importance of bank lending on RWA in a modern economy. It matters for some retail lending but look at house prices across the EU compared to the UK and you will see mortgages are much less important.
3. As for wholesale lending most companies minimise this because its expensive. It tends only to be needed in take overs. I expect to see RAPIDS in the EU, including the UK, soon. Surprising its not happened sooner.
1. Yup, significantly. But it effects transmission cost of central bank policy to the "real economy". Net Interest Margin is in the crapper and European bank return on Equity is poor compared to UK/US peer group. It's more bad news, on top of bad news. European banks have their heads in the sand on Market risk; ignoring it at every opportunity. 1. BASLE 4 just makes internal models much more expensive.
2. Where I disagree with Strongle is on the importance of bank lending on RWA in a modern economy. It matters for some retail lending but look at house prices across the EU compared to the UK and you will see mortgages are much less important.
3. As for wholesale lending most companies minimise this because its expensive. It tends only to be needed in take overs. I expect to see RAPIDS in the EU, including the UK, soon. Surprising its not happened sooner.
2. Errr, Mortgages yes - but what about prime finance and (Hedge Fund lending) and financing elsewere. As Mrr t, is an expert in Custody type stuff, there is around 16trillion in bank lending programs alone - with several trillion on loan at any one time.
3. Wholseale lending is NOT expensive. Interbank Repo market is around $9trillion; not including derivative financing. RWAs for banks are often low; and Internal Managed Models can spew out very low numbers. There is no unsecured market anymore; everything is collaterilised., But is super sized. 2 of us at the bank ran a gross book between 90-120billion of real balance sheet (not derivative notional). We used to intermediate (or take a spread out of); say cheap cash and balance sheet from Soc Gen; add a spread and sell it to JPM. Cheap cash that should be destined for the real economy- but gets spun out to US banks. See a problem with the model? The US banks took so much cash (and balance sheet) from the European banks; they used to get maxed out on credit lines; so we could step in. Not only were we intermediating for other banks, but spinning our own cheap cash out. The entire wholesale funding market is built on arbitrage pricing structures. Global harminsation of regs; should reduce this; but we still see massive swings and spikes in funding over tricky observation dates (such as year end); basically European banks observe balance sheet at qtr ends, rather than daily as their UK/US peers. They use elastic balance sheets that collapse at quarter end so risks collapse (or are understated). There is no advantage to early regulation adoption, it's make hay whilst the sun shines.
Volker 2.0 is going to allow banks to increase stakes in Hedge Funds (hated by most European regulators). Corporatre relative stratagies in banks are expensive (given Market Risk RWA add on); you just run short long through the hedgie; and take the return via the financing rate.
You have totally, totally underestimated the size of the banking market and how wholesale operates. The GSIBs (Globally Significant Investment Banks) have teams of us working out how to arbitrage the rules or where other banks / jurisdictions are going to implement BASEL rules (which is left to the local regulator to interpret); it's not consistent. It's not all arbitrage is bad; often we are brought industry commitees to make teh system safer / expose holes in BASEL rules. A few of us had to redesign the initial and variation margin for OTC derivatives; as the unwind mechanism wanted by the lawyers was a nonsense.The lawyers and custodians wanted a 10 day unwind period in the midst of a likely firesale. We made the world safer(ish).
There is other stuff; but I can't breach NDAs (at the risk of the sounding a bit Helicopter or Nickgnome) - but you have a very narrow focus on banking that is missing the wooods for the trees. It has to be massive, look at central bank balance sheet; and work out whom it is going through. People don't have access to central bank window; it's going through the banks and being churned.
Edited by stongle on Wednesday 23 October 11:27
Edited by stongle on Wednesday 23 October 11:28
stongle said:
Responses in numbers......
I have edited for brevity. Some I agree with some less so but that's the beauty of economic argument. You never know if you where wrong or right until its history. When you often find out you where all wrong! stongle said:
6. It was a hard night out, I'm suffering now. The Mood music coming of banks right now is awful. Bonus's in the crapper; cost cutting is the new normal (getting crushed). Drinking sorrows away.
I know I was glad I could exit. I know of a number who have been made redundant in the past few years. Many are struggling to get back in the market. It's tough and will be getting tougher. The loss of passporting will be make it worst in the UK in my view. Earthdweller said:
Sway said:
soupdragon1 said:
On the news in NI this morning….
Simon Hoare MP was on Radio Ulster this morning and gave a surprisingly open interview, and in some respects, insights into the type of conversations that were going on being Tory closed doors.
Much has been said (certainly here across the Irish Sea) about Congress in USA only approving a post Brexit UK trade deal as long as there in no land border in Ireland. Land border goes up – down goes a UK trade deal. Simon Hoare came out and said it in black and white this morning that the post Brexit vision is trade deals with the like of America, and that an Irish Land Border is a blocker, so the Tories are absolutely lined up with the EU in that respect. That’s contrary to what some have been led to believe, that the EU is using GFA as leverage against the UK – EU and UK are actually on the same page here – you could maybe say that’s its actually the USA that are influencing the UK to take that position, rather than the EU.
DUP have been saying that it’s the EU/ROI/Varadkar using leverage against NI but Simon Hoare has confirmed that the USA are another key stakeholder in this situation.
And as if the DUP humiliation at being ceremoniously dumped by the Tories isn’t enough, Simon Hoare put the boot in once again this morning, by saying that the DUP have yet to provide workable alternatives – they just keep saying they don’t like it with no real plan of what else can be done.
He went on to say that while he recognises the additional paperwork concerns for NI business, there is an offset to that in fact that having a unique deal where we have a foot in both camps and can have relatively frictionless trade with both UK and EU – ie, when weighing up the pro’s and con’s – the Tories firmly believe they have won a good compromise for NI, despite the DUP objections.
In summary – in terms of the overall picture for Brexit, UK, NI, EU, ROW – DUP had a voice, but the Tories have now decided quite clearly that they are carrying on without them.
And if all of the above isn’t a massive kick in the teeth for the DUP, there are underlying rumours that there are further kicks coming the DUP’s directions if they start opposing the Tory Govt (eg, by lending support to adjusting Johnsons WA to include a CU) then the Govt could ‘threaten’ the DUP with an Irish Language Act in NI.
Just this week, the absence of Stormont has resulted in GB abortion/Gay marriage legislation being introduced in NI (DUP strongly oppose both as well as large sections of their electorate) so after that big kick in the teeth – to see it followed up with an Irish Language Act being introduced would be a massive kick in the teeth.
The DUP have went from holding a position of power in the Tory Govt to ground zero…and quite possibly, a complete reversal where they are staring down the barrel of a Tory party who will stop at nothing to get their way.
I haven’t added my opinion to any of this yet, but it appears the Tories are getting quite aggressive in their strategy. Not only did they throw the DUP under the bus – it appears they are going to block off all the roads to ensure the emergency services are unable to reach them. Make of that what you will.
Interesting, thanks. Simon Hoare MP was on Radio Ulster this morning and gave a surprisingly open interview, and in some respects, insights into the type of conversations that were going on being Tory closed doors.
Much has been said (certainly here across the Irish Sea) about Congress in USA only approving a post Brexit UK trade deal as long as there in no land border in Ireland. Land border goes up – down goes a UK trade deal. Simon Hoare came out and said it in black and white this morning that the post Brexit vision is trade deals with the like of America, and that an Irish Land Border is a blocker, so the Tories are absolutely lined up with the EU in that respect. That’s contrary to what some have been led to believe, that the EU is using GFA as leverage against the UK – EU and UK are actually on the same page here – you could maybe say that’s its actually the USA that are influencing the UK to take that position, rather than the EU.
DUP have been saying that it’s the EU/ROI/Varadkar using leverage against NI but Simon Hoare has confirmed that the USA are another key stakeholder in this situation.
And as if the DUP humiliation at being ceremoniously dumped by the Tories isn’t enough, Simon Hoare put the boot in once again this morning, by saying that the DUP have yet to provide workable alternatives – they just keep saying they don’t like it with no real plan of what else can be done.
He went on to say that while he recognises the additional paperwork concerns for NI business, there is an offset to that in fact that having a unique deal where we have a foot in both camps and can have relatively frictionless trade with both UK and EU – ie, when weighing up the pro’s and con’s – the Tories firmly believe they have won a good compromise for NI, despite the DUP objections.
In summary – in terms of the overall picture for Brexit, UK, NI, EU, ROW – DUP had a voice, but the Tories have now decided quite clearly that they are carrying on without them.
And if all of the above isn’t a massive kick in the teeth for the DUP, there are underlying rumours that there are further kicks coming the DUP’s directions if they start opposing the Tory Govt (eg, by lending support to adjusting Johnsons WA to include a CU) then the Govt could ‘threaten’ the DUP with an Irish Language Act in NI.
Just this week, the absence of Stormont has resulted in GB abortion/Gay marriage legislation being introduced in NI (DUP strongly oppose both as well as large sections of their electorate) so after that big kick in the teeth – to see it followed up with an Irish Language Act being introduced would be a massive kick in the teeth.
The DUP have went from holding a position of power in the Tory Govt to ground zero…and quite possibly, a complete reversal where they are staring down the barrel of a Tory party who will stop at nothing to get their way.
I haven’t added my opinion to any of this yet, but it appears the Tories are getting quite aggressive in their strategy. Not only did they throw the DUP under the bus – it appears they are going to block off all the roads to ensure the emergency services are unable to reach them. Make of that what you will.
For me, the smartest thing Johnson did was create the conditions for internal rebellion, so he could withdraw the whip and instantly defang the DUP.
Good to see the bigger picture being put out there and showing the DUP for what they are
I think the deal has the potential to work very well in favour of NI with it being in both camps
Only this week we’ve seen nearly a thousand well paid jobs lost in the South as high tech multinationals pull out
NI being in a position to offer both markets could play very well for internal investment
I wish that NI Politicians in general could look beyond their own navels
Meanwhile - Julian Smith standing firm under questioning from the DUP today - stating NI is getting 'best of both worlds' and that they shouldn't be afraid of a Stormont simple majority vote (rather than a veto that DUP would like) and that the Govt would make paperwork as simple as possible for customs declarations.
The language is changing from 'here's my diplomatic response' to 'this is what's happening whether you are with us or not'
The fact Boris got his deal approved in principal last night has put some wind in the Tory sails and when we consider how open and direct Simon Hoare was on NI regional news this morning, the DUP are finished in terms of any influence they might have thought they had. The DUP are now just 'members of the opposition'
Escapegoat said:
Tycho said:
So what happens if remain win this time?
Surely, we go to best of three, after spending another 3 years waiting to see how a remain scenario pans out.Or maybe just go straight to a penalty shoot out on the grass at Parliament Square?
stongle said:
1. Yup, significantly. But it effects transmission cost of central bank policy to the "real economy". Net Interest Margin is in the crapper and European bank return on Equity is poor compared to UK/US peer group. It's more bad news, on top of bad news. European banks have their heads in the sand on Market risk; ignoring it at every opportunity.
2. Errr, Mortgages yes - but what about prime finance and (Hedge Fund lending) and financing elsewere. As Mrr t, is an expert in Custody type stuff, there is around 16trillion in bank lending programs alone - with several trillion on loan at any one time.
3. Wholseale lending is NOT expensive. Interbank Repo market is around $9trillion; not including derivative financing. RWAs for banks are often low; and Internal Managed Models can spew out very low numbers. There is no unsecured market anymore; everything is collaterilised., But is super sized. 2 of us at the bank ran a gross book between 90-120billion of real balance sheet (not derivative notional). We used to intermediate (or take a spread out of); say cheap cash and balance sheet from Soc Gen; add a spread and sell it to JPM. Cheap cash that should be destined for the real economy- but gets spun out to US banks. See a problem with the model? The US banks took so much cash (and balance sheet) from the European banks; they used to get maxed out on credit lines; so we could step in. Not only were we intermediating for other banks, but spinning our own cheap cash out. The entire wholesale funding market is built on arbitrage pricing structures. Global harminsation of regs; should reduce this; but we still see massive swings and spikes in funding over tricky observation dates (such as year end); basically European banks observe balance sheet at qtr ends, rather than daily as their UK/US peers. They use elastic balance sheets that collapse at quarter end so risks collapse (or are understated). There is no advantage to early regulation adoption, it's make hay whoilst the sun shines.
Volker 2.0 is going to allow banks to increase stakes in Hedge Funds (hated by most European regulators). Corporatre relative stratagies in banks are expensive (given Market Risk RWA add on); you just run short long through the hedgie; and take the return via the financing rate.
You have totally, totally underestimated the size of the banking market and how wholesale operates. The GSIBs (Globally Significant Investment Banks) have teams of us working out how to arbitrage the rules or where other banks / jurisdictions are going to implement BASEL rules (which is left to the local regulator to interpret); it's not consistent. It's not all arbitrage is bad; often we are brought industry commitees to make teh system safer / expose holes in BASEL rules. A few of us had to redesign the initial and variation margin for OTC derivatives; as the unwind mechanism wanted by the lawyers was a nonsense.The lawyers and custodians wanted a 10 day unwind period in the midst of a likely firesale. We made the world safer(ish).
There is other stuff; but I can't breach NDAs (at the risk of the sounding a bit Helicopter or Nickgnome) - but you have a very narrow focus on banking that is missing the wooods for the trees. It has to be massive, look at central bank balance sheet; and work out whom it is going through. People don't have access to central bank window; it's going through the banks and being churned.
1. I was only aware of the limits on internal models. I agree on EU banks profitability. However, it's not all rosy in the UK. That includes some US banks based in the UK. 2. Errr, Mortgages yes - but what about prime finance and (Hedge Fund lending) and financing elsewere. As Mrr t, is an expert in Custody type stuff, there is around 16trillion in bank lending programs alone - with several trillion on loan at any one time.
3. Wholseale lending is NOT expensive. Interbank Repo market is around $9trillion; not including derivative financing. RWAs for banks are often low; and Internal Managed Models can spew out very low numbers. There is no unsecured market anymore; everything is collaterilised., But is super sized. 2 of us at the bank ran a gross book between 90-120billion of real balance sheet (not derivative notional). We used to intermediate (or take a spread out of); say cheap cash and balance sheet from Soc Gen; add a spread and sell it to JPM. Cheap cash that should be destined for the real economy- but gets spun out to US banks. See a problem with the model? The US banks took so much cash (and balance sheet) from the European banks; they used to get maxed out on credit lines; so we could step in. Not only were we intermediating for other banks, but spinning our own cheap cash out. The entire wholesale funding market is built on arbitrage pricing structures. Global harminsation of regs; should reduce this; but we still see massive swings and spikes in funding over tricky observation dates (such as year end); basically European banks observe balance sheet at qtr ends, rather than daily as their UK/US peers. They use elastic balance sheets that collapse at quarter end so risks collapse (or are understated). There is no advantage to early regulation adoption, it's make hay whoilst the sun shines.
Volker 2.0 is going to allow banks to increase stakes in Hedge Funds (hated by most European regulators). Corporatre relative stratagies in banks are expensive (given Market Risk RWA add on); you just run short long through the hedgie; and take the return via the financing rate.
You have totally, totally underestimated the size of the banking market and how wholesale operates. The GSIBs (Globally Significant Investment Banks) have teams of us working out how to arbitrage the rules or where other banks / jurisdictions are going to implement BASEL rules (which is left to the local regulator to interpret); it's not consistent. It's not all arbitrage is bad; often we are brought industry commitees to make teh system safer / expose holes in BASEL rules. A few of us had to redesign the initial and variation margin for OTC derivatives; as the unwind mechanism wanted by the lawyers was a nonsense.The lawyers and custodians wanted a 10 day unwind period in the midst of a likely firesale. We made the world safer(ish).
There is other stuff; but I can't breach NDAs (at the risk of the sounding a bit Helicopter or Nickgnome) - but you have a very narrow focus on banking that is missing the wooods for the trees. It has to be massive, look at central bank balance sheet; and work out whom it is going through. People don't have access to central bank window; it's going through the banks and being churned.
Edited by stongle on Wednesday 23 October 11:27
Edited by stongle on Wednesday 23 October 11:28
2. Prime is a good business for a very limited number of players. But hedge is what 0.1% of the total investment market world wide? I can not see any published figures but in the scheme its nothing.
3. A difference in terminology. By wholesale I mean FS dealing with large non FS companies. Bank to bank is interbank. I agree interbank is huge but to me its just shoveling money. The effect on the real economy is minimal. It does not divert investment from the real economy because wholesale borrowers do not borrow from banks. My point was the effect of BASLE 4 on the non FS economy is small.
soupdragon1 said:
Earthdweller said:
Sway said:
soupdragon1 said:
On the news in NI this morning….
Simon Hoare MP was on Radio Ulster this morning and gave a surprisingly open interview, and in some respects, insights into the type of conversations that were going on being Tory closed doors.
Much has been said (certainly here across the Irish Sea) about Congress in USA only approving a post Brexit UK trade deal as long as there in no land border in Ireland. Land border goes up – down goes a UK trade deal. Simon Hoare came out and said it in black and white this morning that the post Brexit vision is trade deals with the like of America, and that an Irish Land Border is a blocker, so the Tories are absolutely lined up with the EU in that respect. That’s contrary to what some have been led to believe, that the EU is using GFA as leverage against the UK – EU and UK are actually on the same page here – you could maybe say that’s its actually the USA that are influencing the UK to take that position, rather than the EU.
DUP have been saying that it’s the EU/ROI/Varadkar using leverage against NI but Simon Hoare has confirmed that the USA are another key stakeholder in this situation.
And as if the DUP humiliation at being ceremoniously dumped by the Tories isn’t enough, Simon Hoare put the boot in once again this morning, by saying that the DUP have yet to provide workable alternatives – they just keep saying they don’t like it with no real plan of what else can be done.
He went on to say that while he recognises the additional paperwork concerns for NI business, there is an offset to that in fact that having a unique deal where we have a foot in both camps and can have relatively frictionless trade with both UK and EU – ie, when weighing up the pro’s and con’s – the Tories firmly believe they have won a good compromise for NI, despite the DUP objections.
In summary – in terms of the overall picture for Brexit, UK, NI, EU, ROW – DUP had a voice, but the Tories have now decided quite clearly that they are carrying on without them.
And if all of the above isn’t a massive kick in the teeth for the DUP, there are underlying rumours that there are further kicks coming the DUP’s directions if they start opposing the Tory Govt (eg, by lending support to adjusting Johnsons WA to include a CU) then the Govt could ‘threaten’ the DUP with an Irish Language Act in NI.
Just this week, the absence of Stormont has resulted in GB abortion/Gay marriage legislation being introduced in NI (DUP strongly oppose both as well as large sections of their electorate) so after that big kick in the teeth – to see it followed up with an Irish Language Act being introduced would be a massive kick in the teeth.
The DUP have went from holding a position of power in the Tory Govt to ground zero…and quite possibly, a complete reversal where they are staring down the barrel of a Tory party who will stop at nothing to get their way.
I haven’t added my opinion to any of this yet, but it appears the Tories are getting quite aggressive in their strategy. Not only did they throw the DUP under the bus – it appears they are going to block off all the roads to ensure the emergency services are unable to reach them. Make of that what you will.
Interesting, thanks. Simon Hoare MP was on Radio Ulster this morning and gave a surprisingly open interview, and in some respects, insights into the type of conversations that were going on being Tory closed doors.
Much has been said (certainly here across the Irish Sea) about Congress in USA only approving a post Brexit UK trade deal as long as there in no land border in Ireland. Land border goes up – down goes a UK trade deal. Simon Hoare came out and said it in black and white this morning that the post Brexit vision is trade deals with the like of America, and that an Irish Land Border is a blocker, so the Tories are absolutely lined up with the EU in that respect. That’s contrary to what some have been led to believe, that the EU is using GFA as leverage against the UK – EU and UK are actually on the same page here – you could maybe say that’s its actually the USA that are influencing the UK to take that position, rather than the EU.
DUP have been saying that it’s the EU/ROI/Varadkar using leverage against NI but Simon Hoare has confirmed that the USA are another key stakeholder in this situation.
And as if the DUP humiliation at being ceremoniously dumped by the Tories isn’t enough, Simon Hoare put the boot in once again this morning, by saying that the DUP have yet to provide workable alternatives – they just keep saying they don’t like it with no real plan of what else can be done.
He went on to say that while he recognises the additional paperwork concerns for NI business, there is an offset to that in fact that having a unique deal where we have a foot in both camps and can have relatively frictionless trade with both UK and EU – ie, when weighing up the pro’s and con’s – the Tories firmly believe they have won a good compromise for NI, despite the DUP objections.
In summary – in terms of the overall picture for Brexit, UK, NI, EU, ROW – DUP had a voice, but the Tories have now decided quite clearly that they are carrying on without them.
And if all of the above isn’t a massive kick in the teeth for the DUP, there are underlying rumours that there are further kicks coming the DUP’s directions if they start opposing the Tory Govt (eg, by lending support to adjusting Johnsons WA to include a CU) then the Govt could ‘threaten’ the DUP with an Irish Language Act in NI.
Just this week, the absence of Stormont has resulted in GB abortion/Gay marriage legislation being introduced in NI (DUP strongly oppose both as well as large sections of their electorate) so after that big kick in the teeth – to see it followed up with an Irish Language Act being introduced would be a massive kick in the teeth.
The DUP have went from holding a position of power in the Tory Govt to ground zero…and quite possibly, a complete reversal where they are staring down the barrel of a Tory party who will stop at nothing to get their way.
I haven’t added my opinion to any of this yet, but it appears the Tories are getting quite aggressive in their strategy. Not only did they throw the DUP under the bus – it appears they are going to block off all the roads to ensure the emergency services are unable to reach them. Make of that what you will.
For me, the smartest thing Johnson did was create the conditions for internal rebellion, so he could withdraw the whip and instantly defang the DUP.
Good to see the bigger picture being put out there and showing the DUP for what they are
I think the deal has the potential to work very well in favour of NI with it being in both camps
Only this week we’ve seen nearly a thousand well paid jobs lost in the South as high tech multinationals pull out
NI being in a position to offer both markets could play very well for internal investment
I wish that NI Politicians in general could look beyond their own navels
Meanwhile - Julian Smith standing firm under questioning from the DUP today - stating NI is getting 'best of both worlds' and that they shouldn't be afraid of a Stormont simple majority vote (rather than a veto that DUP would like) and that the Govt would make paperwork as simple as possible for customs declarations.
The language is changing from 'here's my diplomatic response' to 'this is what's happening whether you are with us or not'
The fact Boris got his deal approved in principal last night has put some wind in the Tory sails and when we consider how open and direct Simon Hoare was on NI regional news this morning, the DUP are finished in terms of any influence they might have thought they had. The DUP are now just 'members of the opposition'
The DUP are being put back in their box, with assorted tyre-thread marks all over them from the bus they were thrown under.
We should see how easy those "Technical Solutions" are going to be to develop and deploy for the Irish Border given that it's going to be a Sea Border rather than a more complex Land Border.
Majority vote returns to Stormont rather than consensus/veto of the GFA - ironically, something which the DUP had been seeking.
If this works out well economically for NI then there should be less chance for a successful Border Poll - the Union is strengthened despite the DUP.
Funny old world.
Escapegoat said:
Tycho said:
So what happens if remain win this time?
Surely, we go to best of three, after spending another 3 years waiting to see how a remain scenario pans out.Or maybe just go straight to a penalty shoot out on the grass at Parliament Square?
"Scissors cuts paper, paper covers rock, rock crushes lizard, lizard poisons Spock, Spock smashes scissors, scissors decapitates lizard, lizard eats paper, paper disproves Spock, Spock vaporizes rock, and as it always has, rock crushes scissors."
Interesting point from Shanker Singham on Twitter:
"A word on customs costs and disruptions. Trade from Netherlands to Italy or other Southern European destinations chooses to go through Switzerland and not stay in EU even though customs forms and transit declarations are required because the logistics costs are more significant."
4:11 am - 23 Oct 2019
https://twitter.com/ShankerASingham/status/1186963...
"A word on customs costs and disruptions. Trade from Netherlands to Italy or other Southern European destinations chooses to go through Switzerland and not stay in EU even though customs forms and transit declarations are required because the logistics costs are more significant."
4:11 am - 23 Oct 2019
https://twitter.com/ShankerASingham/status/1186963...
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