Brexit - was it worth it? (Vol. 2)
Discussion
Iminquarantine said:
They must do this for the reasons summarised here:
“ among the biggest losses to both parties will be the ability to continue passporting their services into the other party’s territory. From the beginning of the year, a UK financial-services firm will not be able to establish a presence in the EU, and vice versa, or provide cross-border services into each other’s territory based on an authorisation obtained under its domestic law. They can, however, still do business as before, but only in compliance with local authorisation and licensing requirements, and once obtained, they will be treated with the same favourability as domestic entities.”
If you do not have a local office, you are quite limited in what you can do in the UK. Of course this remains an overhead and there is still a EU - UK barrier.
Therefore the commentary continues:
“ Perhaps the most crucial impact from Brexit will be the clearing of euro-denominated trades. With the size of the European derivatives market standing at more than $830 trillion as of 2019 and the majority of European trades being cleared using London-based clearinghouses, the UK will want to hold on to this business for as long as possible. But the EU’s ultimate goal is to house euro-denominated derivatives trading within its borders or in those locations with equivalent regulations. And although the UK’s HM Treasury has already granted such equivalency for EU firms in most areas, the EU has reciprocated for the UK’s derivatives clearing only until June 2022, as well as for the settlement of Irish securities.
Until that deadline, EU firms may well gradually lower their reliance on London clearinghouses. What’s more, the European Commission can also revoke the equivalency it has granted with 30 days’ notice. Such uncertainty may prompt a further exodus of financial firms from the City of London and towards the EU. Can the UK finalise a deal to secure permanent equivalency? Perhaps, but then one wonders what it will have to relinquish to obtain such an arrangement.”
Consistent with foreign entities setting up offices in order to remain functional. While still being a net move of staff, money, assets, trades out of the UK and into the EU.
Most of that is entirely speculative (but thanks for pointing out the blackmail stick they like to willy wave about). It shows a poor understanding if how firms determine choice of clearing location. Clearing is often determined by most efficient margin outcome. Reducing margin costs improves your LR and reduces costs. Firms will be looking at the portfolio effect of their positions, determining clearer dynamically.“ among the biggest losses to both parties will be the ability to continue passporting their services into the other party’s territory. From the beginning of the year, a UK financial-services firm will not be able to establish a presence in the EU, and vice versa, or provide cross-border services into each other’s territory based on an authorisation obtained under its domestic law. They can, however, still do business as before, but only in compliance with local authorisation and licensing requirements, and once obtained, they will be treated with the same favourability as domestic entities.”
If you do not have a local office, you are quite limited in what you can do in the UK. Of course this remains an overhead and there is still a EU - UK barrier.
Therefore the commentary continues:
“ Perhaps the most crucial impact from Brexit will be the clearing of euro-denominated trades. With the size of the European derivatives market standing at more than $830 trillion as of 2019 and the majority of European trades being cleared using London-based clearinghouses, the UK will want to hold on to this business for as long as possible. But the EU’s ultimate goal is to house euro-denominated derivatives trading within its borders or in those locations with equivalent regulations. And although the UK’s HM Treasury has already granted such equivalency for EU firms in most areas, the EU has reciprocated for the UK’s derivatives clearing only until June 2022, as well as for the settlement of Irish securities.
Until that deadline, EU firms may well gradually lower their reliance on London clearinghouses. What’s more, the European Commission can also revoke the equivalency it has granted with 30 days’ notice. Such uncertainty may prompt a further exodus of financial firms from the City of London and towards the EU. Can the UK finalise a deal to secure permanent equivalency? Perhaps, but then one wonders what it will have to relinquish to obtain such an arrangement.”
Consistent with foreign entities setting up offices in order to remain functional. While still being a net move of staff, money, assets, trades out of the UK and into the EU.
Opengamma being one such source of education.
Edited by stongle on Monday 22 February 22:01
stongle said:
CraigyMc said:
https://www.reuters.com/article/britain-eu-markets...
Keep banging the drum, that'll make it all betterer.
A whole 50m-75m in revenues? Wozzers. Nor even a surprise, everyone knew it was happening 2 years in advance (and the profits from the venues mostly end up back in the UK).Keep banging the drum, that'll make it all betterer.
Iminquarantine said:
That 50-75m seems quite low, given the London Stock Exchange revenue was GBP 2.3 bn according to their 2019 annual report. Additionally, would you not say that when trading exits the UK, further money earning financial services follow?
Because they are venues (not a stick exchange) and the comms are sub basis points. We used to pay about 1/8bps on Spanish shs and that was expensive due to registration costs. They probably have a minimum trade fee hence getting them to 50-70mEdited by stongle on Monday 22 February 22:06
Edited by stongle on Monday 22 February 22:07
stongle said:
Most of that is entirely speculative (but thanks for pointing out the blackmail stick they like to willy wave about). It shows a poor understanding if how firms determine choice of clearing location. Clearing is often determined by most efficient margin outcome. Reducing margin costs improves your LR and reduces costs. Firms will be looking at the portfolio effect of their positions, determining clearer dynamically.
Blackmail stick? The U.K. did not negotiate a financial services deal. It could have negotiated one in the 4+ years time available, but it didn’t. That now leaves the UK in a weak position. The UK is now a competitor 3rd nation to the EU, so it owes us no favours.On clearing location, the earlier quoted Amsterdam report is only part of the story.
“It is also benefiting from IPO, whereas London..... isn’t. Further news “ Amsterdam leads the European listings table this year,having attracted $3.4 billion-worth of initial public offerings (IPOs), Refinitiv data shows. That included Poland's InPost,which raised 2.8 billion euros in the biggest European IPO in 2021 so far. Spanish fintech form Allfunds, Dutch web startup WeTransferand two "blank-cheque" firms - one backed by ex-Commerzbankchief executive Martin Blessing and another by French tycoonBernard Arnault - are planning to list on Euronext Amsterdam.””
Iminquarantine said:
Blackmail stick? The U.K. did not negotiate a financial services deal. It could have negotiated one in the 4+ years time available, but it didn’t. That now leaves the UK in a weak position.
Wasn’t it the EU that refused to talk about FS as the expertise is handed down to national regulators?Iminquarantine said:
The UK is now a competitor 3rd nation to the EU, so it owes us no favours.
On clearing location, the earlier quoted Amsterdam report is only part of the story.
“It is also benefiting from IPO, whereas London..... isn’t. Further news “ Amsterdam leads the European listings table this year,having attracted $3.4 billion-worth of initial public offerings (IPOs), Refinitiv data shows. That included Poland's InPost,which raised 2.8 billion euros in the biggest European IPO in 2021 so far. Spanish fintech form Allfunds, Dutch web startup WeTransferand two "blank-cheque" firms - one backed by ex-Commerzbankchief executive Martin Blessing and another by French tycoonBernard Arnault - are planning to list on Euronext Amsterdam.””
What has the IPO comment got to do with Clearing?On clearing location, the earlier quoted Amsterdam report is only part of the story.
“It is also benefiting from IPO, whereas London..... isn’t. Further news “ Amsterdam leads the European listings table this year,having attracted $3.4 billion-worth of initial public offerings (IPOs), Refinitiv data shows. That included Poland's InPost,which raised 2.8 billion euros in the biggest European IPO in 2021 so far. Spanish fintech form Allfunds, Dutch web startup WeTransferand two "blank-cheque" firms - one backed by ex-Commerzbankchief executive Martin Blessing and another by French tycoonBernard Arnault - are planning to list on Euronext Amsterdam.””
Edited by 992_GT3 on Monday 22 February 22:30
Tryke3 said:
992_GT3 said:
What has the IPO comment got to do with Clearing?
The EU knows what it is doing...., Edited by 992_GT3 on Monday 22 February 22:30
Whether it is always doing the right thing or the best thing (even for itself) is an entirely different debate !
(See vaccine procurement, QED)
DeepEnd said:
Is this a joke?
"The criteria to sign players is based on a points system which considers the number of senior and youth international appearances, club appearances as well as the quality of the selling club, its league position and the league itself."
Is some bureaucrat really sat at a desk assessing the quality of a foreign selling club against some sort of checklist to determine if a player can come in?
Does talent come into at all?
Reminds me of the stories of Trabant waiting lists - perhaps we can get the new young teenage football talent over here when they're 36.
Quality R Reagan joke:
https://www.youtube.com/watch?v=CLW7r4o2_Ow&ab...
A football club is a business like any other. To get a work permit, you need to show that either there is no-one suitable in the UK (obviously hard to do, as there are thousands of professional footballers) or that they are an 'exceptional talent'. Immigration aren't going to take a business's word for it that the person is an exceptional talent, otherwise it would be all too easy to set up scams - "these twenty Lithuanians are exceptionally talented & world class fruit pickers"..."The criteria to sign players is based on a points system which considers the number of senior and youth international appearances, club appearances as well as the quality of the selling club, its league position and the league itself."
Is some bureaucrat really sat at a desk assessing the quality of a foreign selling club against some sort of checklist to determine if a player can come in?
Does talent come into at all?
Reminds me of the stories of Trabant waiting lists - perhaps we can get the new young teenage football talent over here when they're 36.
Quality R Reagan joke:
https://www.youtube.com/watch?v=CLW7r4o2_Ow&ab...
If the footballer is coming in from the Barcelona system, it is more likely that they are 'exceptionally talented' rather than if they are coming from Ulanbator United.
992_GT3 said:
Iminquarantine said:
Blackmail stick? The U.K. did not negotiate a financial services deal. It could have negotiated one in the 4+ years time available, but it didn’t. That now leaves the UK in a weak position.
Wasn’t it the EU that refused to talk about FS as the expertise is handed down to national regulators?Iminquarantine said:
The UK is now a competitor 3rd nation to the EU, so it owes us no favours.
On clearing location, the earlier quoted Amsterdam report is only part of the story.
“It is also benefiting from IPO, whereas London..... isn’t. Further news “ Amsterdam leads the European listings table this year,having attracted $3.4 billion-worth of initial public offerings (IPOs), Refinitiv data shows. That included Poland's InPost,which raised 2.8 billion euros in the biggest European IPO in 2021 so far. Spanish fintech form Allfunds, Dutch web startup WeTransferand two "blank-cheque" firms - one backed by ex-Commerzbankchief executive Martin Blessing and another by French tycoonBernard Arnault - are planning to list on Euronext Amsterdam.””
What has the IPO comment got to do with Clearing?On clearing location, the earlier quoted Amsterdam report is only part of the story.
“It is also benefiting from IPO, whereas London..... isn’t. Further news “ Amsterdam leads the European listings table this year,having attracted $3.4 billion-worth of initial public offerings (IPOs), Refinitiv data shows. That included Poland's InPost,which raised 2.8 billion euros in the biggest European IPO in 2021 so far. Spanish fintech form Allfunds, Dutch web startup WeTransferand two "blank-cheque" firms - one backed by ex-Commerzbankchief executive Martin Blessing and another by French tycoonBernard Arnault - are planning to list on Euronext Amsterdam.””
Edited by 992_GT3 on Monday 22 February 22:30
The 30day equivalence stick was used to beat the Swiss into submission on immigration a couple of years ago (well documented here and the media), no one apart from the EC and associated mentalists actually think threatening financial stability is a good thing.
I could go on, but actual facts about the business in question is boring better that you believe your own made up maths and fairy tales.
Oh, the IPO tangent. Do you have evidence that the 2 IPOs in question were switched to Amsterdam "cos-Brexit"? If you don't, then its nonsense. Linking in Martin Blessing is either ignorance (pick random ex-CEO) or an act of hitherto unseen media irony.
Tryke3 said:
The EU knows what it is doing, cant say the same about clown, unfortunately we will pay with our standard of living and it seems this what the narcissist brexiteers want
Unlikely.If they do know what its doing; France wouldn't have just brought in Accenture and Mckinsey to sort its vaccine programme.
And for evey 18million Brexit "narcissists", I raise you Macron.
stongle said:
We've had that one doing the rounds since 2020, the remain team didn't believe it then, won't now....
Stongle, one must learn from the Remainer play book and keep resurrecting the same story over and over again - I see the Amsterdam trouncing, nay decimating, London in the financial stakes (well share dealing anyway) has raised its head yet again!wisbech said:
A football club is a business like any other. To get a work permit, you need to show that either there is no-one suitable in the UK (obviously hard to do, as there are thousands of professional footballers) or that they are an 'exceptional talent'. Immigration aren't going to take a business's word for it that the person is an exceptional talent, otherwise it would be all too easy to set up scams - "these twenty Lithuanians are exceptionally talented & world class fruit pickers"...
If the footballer is coming in from the Barcelona system, it is more likely that they are 'exceptionally talented' rather than if they are coming from Ulanbator United.
Well it seems Allardyce wanted those 3 players that were not allowed - and from his words they were better than his current team at least.If the footballer is coming in from the Barcelona system, it is more likely that they are 'exceptionally talented' rather than if they are coming from Ulanbator United.
I’d say he was better placed than some home office immigration box ticker as to whether they were good for his business.
They are also hardly going to get 700 daffodil pickers through this football “back door” either.
It’s true that business makes business, not govt. But govt can’t half get in the way (in a bad way). This doesn’t seem a good area for such box ticking.
Garvin said:
Stongle, one must learn from the Remainer play book and keep resurrecting the same story over and over again - I see the Amsterdam trouncing, nay decimating, London in the financial stakes (well share dealing anyway) has raised its head yet again!
The trick in repeating an argument, is to pick one that a) you actually understand all the ins and outs on b) make sure its triple A rated slam dunk defendable.When you start confusing trading venues and stock exchanges (and the economics of share dealing), you have failed on both the above requirements.
Both the UK and EU financial (plus wider) services business now exist in a state of dual attrition. There will be losses on both sides. Most of which were/are entirely avoidable, but for the will of the EC to weaponise equivalence. And as earlier only nutters think that's a good idea. Or that anything Martin Blessing says is worth paying attention to - If you take 18bn euros in a bailout, then rip the eyes out of the German and other EU tax authorities for roughly the same again on dodgy tax wheezes (cos profits); you cannot be treated as a credible source on anything.
stongle said:
Garvin said:
Stongle, one must learn from the Remainer play book and keep resurrecting the same story over and over again - I see the Amsterdam trouncing, nay decimating, London in the financial stakes (well share dealing anyway) has raised its head yet again!
The trick in repeating an argument, is to pick one that a) you actually understand all the ins and outs on b) make sure its triple A rated slam dunk defendable.When you start confusing trading venues and stock exchanges (and the economics of share dealing), you have failed on both the above requirements.
Both the UK and EU financial (plus wider) services business now exist in a state of dual attrition. There will be losses on both sides. Most of which were/are entirely avoidable, but for the will of the EC to weaponise equivalence. And as earlier only nutters think that's a good idea. Or that anything Martin Blessing says is worth paying attention to - If you take 18bn euros in a bailout, then rip the eyes out of the German and other EU tax authorities for roughly the same again on dodgy tax wheezes (cos profits); you cannot be treated as a credible source on anything.
t and hope some of it sticks. See the posts on the apparent decimation of the fishing folks “jobs and livelihoods” where absolutely none of the dimble brained, rabid anti-Brexxers posting their faux outrage about it could answer the simple question of how many jobs had actually gone!barryrs said:
Iminquarantine said:
992_GT3 said:
We have cut the cord from the EU, NOT the Europeans.
Nope, the Brexit deal requires that the UK maintain EU product standards and minimum labour standards with our nearest-biggest trading partner. Bob on production line 1 gets paid leave, health and safety, etc.
Production line 2 is staffed with children who are beaten to work harder.
Insurers have called on the UK government to water down Solvency II, the EU’s insurance capital regime, in what would be the first major departure for the financial sector from Brussels’ rule book since Brexit.
The Association of British Insurers has urged ministers to reduce the capital buffer their members are required to hold, and to give them more freedom over how they invest their assets. The changes would allow insurers to redeploy a total of £95bn, the trade body said, including passing a slice of that on to shareholders.
https://amp.ft.com/content/c75d5323-5193-4f19-9b28...
“We’ve had the costs, now we must seize the opportunity,” said Evans. “The opportunity comes in having a Solvency II framework that provides strong policyholder protection — as strong as we had before — but with a set of rules that are designed for the UK market, not for [the EU] 28.”
The UK’s life insurers, which would be the major beneficiaries of the ABI’s proposed changes to Solvency II, have little to gain from equivalence as they mostly operate in their domestic market.
Solvency II was introduced in 2016 as a way to harmonise the bloc’s insurance capital rules. The regulations, which run to thousands of pages, took over a decade to negotiate and were given added urgency by the 2008 financial crisis.
The matching adjustment and risk margin — two of the regime’s most contentious areas — were agreed after lengthy discussions between the member states. UK insurers have been critical of both aspects, arguing they unnecessarily increase capital requirements and make it more difficult to invest in long-term assets such as infrastructure projects.
The Association of British Insurers has urged ministers to reduce the capital buffer their members are required to hold, and to give them more freedom over how they invest their assets. The changes would allow insurers to redeploy a total of £95bn, the trade body said, including passing a slice of that on to shareholders.
https://amp.ft.com/content/c75d5323-5193-4f19-9b28...
“We’ve had the costs, now we must seize the opportunity,” said Evans. “The opportunity comes in having a Solvency II framework that provides strong policyholder protection — as strong as we had before — but with a set of rules that are designed for the UK market, not for [the EU] 28.”
The UK’s life insurers, which would be the major beneficiaries of the ABI’s proposed changes to Solvency II, have little to gain from equivalence as they mostly operate in their domestic market.
Solvency II was introduced in 2016 as a way to harmonise the bloc’s insurance capital rules. The regulations, which run to thousands of pages, took over a decade to negotiate and were given added urgency by the 2008 financial crisis.
The matching adjustment and risk margin — two of the regime’s most contentious areas — were agreed after lengthy discussions between the member states. UK insurers have been critical of both aspects, arguing they unnecessarily increase capital requirements and make it more difficult to invest in long-term assets such as infrastructure projects.
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