BREXIT - Is This Really Still Rumbling On? 😴

rick_chasey

So you’re explaining the advantages which is fine, it what specific financial services suddenly become not available in no deal and in what way does it act as leverage as you described?

Stevo_666

Rick Chasey wrote:

So you’re explaining the advantages which is fine, it what specific financial services suddenly become not available in no deal and in what way does it act as leverage as you described?

I'm just describing the advantages of English law as you seemed to be unaware. BB made the connection with leverage so I'm sure he can explain that.

That said, do you understand the advantages now?

rick_chasey

Stevo 666 wrote:

Rick Chasey wrote:

So you’re explaining the advantages which is fine, it what specific financial services suddenly become not available in no deal and in what way does it act as leverage as you described?

I'm just describing the advantages of English law as you seemed to be unaware. BB made the connection with leverage so I'm sure he can explain that.

That said, do you understand the advantages now?

I always did but you said access or lack of during no deal was leverage that the U.K. had.

I can’t see how that is the case given the prep all the major FS firms have made.

So I was wondering which specific examples of services that are financial people had in mind that would suddenly be unavailable to EU 27 firms or nations.

Stevo_666

Rick Chasey wrote:

Stevo 666 wrote:

Rick Chasey wrote:

So you’re explaining the advantages which is fine, it what specific financial services suddenly become not available in no deal and in what way does it act as leverage as you described?

I'm just describing the advantages of English law as you seemed to be unaware. BB made the connection with leverage so I'm sure he can explain that.

That said, do you understand the advantages now?

I always did but you said access or lack of during no deal was leverage that the U.K. had.

I can’t see how that is the case given the prep all the major FS firms have made.

So I was wondering which specific examples of services that are financial people had in mind that would suddenly be unavailable to EU 27 firms or nations.

Rick, already answered above. I don't need to be more specific than that. You know it is the case. Or else try reading what people post.

Stevo_666

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

darkhairedlord

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

Kind of like toysrus being the middleman between toy companies and children. Except when toysrus gets into trouble customer and supplier can make a new connection through amazon argos or smythe toys. Londons Dominant position is not in perpetuity.

rick_chasey

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

The advantage of the City is all the international firms like doing business there. Part of that is obviously access to the EU etc. Plenty of other parts clearly.

So now if businesses want to do EU business, it’s less easy to do that from London; pretty much all international FS firms have set up the requisite infrastructure in the EU 27 in order to that. Previously that was done in London.

That’s broadly it. EU is the biggest market in the world.

I don’t get what you think is leverage. All the firms, are already set up and already are doing their EU business through their new set ups.

If you’re Dutch firm and you want to buy a load of FX options from Bank of America Merrill Lynch they’ll now do it through their Parisian office and not their London office, for example.

darkhairedlord

A bit like the landlord barring everyone from the only pub in town. The brewery get shot of the landlord.

Stevo_666

darkhairedlord wrote:

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

Kind of like toysrus being the middleman between toy companies and children. Except when toysrus gets into trouble customer and supplier can make a new connection through amazon argos or smythe toys. Londons Dominant position is not in perpetuity.

Nothing is forever, but it will take more than Brexit to change that. In fact there could well be longer term opportunities - even the Guardian thinks so.
https://www.theguardian.com/business/2015/sep/25/brexit-may-benefit-city-of-london-in-the-long-run-says-top-consultancy

https://blogs.lse.ac.uk/brexit/2017/09/08/brexit-is-a-win-win-opportunity-for-the-city-of-london/

Remember also, London is a Global financial centre, not just a European one.

darkhairedlord

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

Kind of like toysrus being the middleman between toy companies and children. Except when toysrus gets into trouble customer and supplier can make a new connection through amazon argos or smythe toys. Londons Dominant position is not in perpetuity.

Nothing is forever, but it will take more than Brexit to change that. In fact there could well be longer term opportunities - even the Guardian thinks so.
https://www.theguardian.com/business/2015/sep/25/brexit-may-benefit-city-of-london-in-the-long-run-says-top-consultancy

https://blogs.lse.ac.uk/brexit/2017/09/08/brexit-is-a-win-win-opportunity-for-the-city-of-london/

Remember also, London is a Global financial centre, not just a European one.

At the moment.
Florence, Siena, plenty of others have blown their market dominance through assuming their own indespensibility.

surrey_commuter

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

Kind of like toysrus being the middleman between toy companies and children. Except when toysrus gets into trouble customer and supplier can make a new connection through amazon argos or smythe toys. Londons Dominant position is not in perpetuity.

Nothing is forever, but it will take more than Brexit to change that. In fact there could well be longer term opportunities - even the Guardian thinks so.
https://www.theguardian.com/business/2015/sep/25/brexit-may-benefit-city-of-london-in-the-long-run-says-top-consultancy

https://blogs.lse.ac.uk/brexit/2017/09/08/brexit-is-a-win-win-opportunity-for-the-city-of-london/

Remember also, London is a Global financial centre, not just a European one.

2nd link, 2nd line - what does this mean
“Outside the Union, Britain will be able to either draft its own rules through an ‘enhanced equivalence’ model”

I did not think we could grant ourselves equivalence?

Most countries do not give up regulating their own FS industry whilst keeping all of the risk.

Most sane people think that the EU will want to regulate their own FS industry and will seize the opportunity to chip away at the predominance of London.

surrey_commuter

Has a GE been announced for 1st November or have the moron’s comprehension levels fallen still lower?

darkhairedlord

Surrey Commuter wrote:

Has a GE been announced for 1st November or have the moron’s comprehension levels fallen still lower?

It's a thread on bicyclists forum, who cares?

Stevo_666

Surrey Commuter wrote:

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

Kind of like toysrus being the middleman between toy companies and children. Except when toysrus gets into trouble customer and supplier can make a new connection through amazon argos or smythe toys. Londons Dominant position is not in perpetuity.

Nothing is forever, but it will take more than Brexit to change that. In fact there could well be longer term opportunities - even the Guardian thinks so.
https://www.theguardian.com/business/2015/sep/25/brexit-may-benefit-city-of-london-in-the-long-run-says-top-consultancy

https://blogs.lse.ac.uk/brexit/2017/09/08/brexit-is-a-win-win-opportunity-for-the-city-of-london/

Remember also, London is a Global financial centre, not just a European one.

2nd link, 2nd line - what does this mean
“Outside the Union, Britain will be able to either draft its own rules through an ‘enhanced equivalence’ model”

I did not think we could grant ourselves equivalence?

Most countries do not give up regulating their own FS industry whilst keeping all of the risk.

Most sane people think that the EU will want to regulate their own FS industry and will seize the opportunity to chip away at the predominance of London.

NAndot sure. But if free from EU FS regulation we have the opportunity to seize more business.

Stevo_666

darkhairedlord wrote:

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

Kind of like toysrus being the middleman between toy companies and children. Except when toysrus gets into trouble customer and supplier can make a new connection through amazon argos or smythe toys. Londons Dominant position is not in perpetuity.

Nothing is forever, but it will take more than Brexit to change that. In fact there could well be longer term opportunities - even the Guardian thinks so.
https://www.theguardian.com/business/2015/sep/25/brexit-may-benefit-city-of-london-in-the-long-run-says-top-consultancy

https://blogs.lse.ac.uk/brexit/2017/09/08/brexit-is-a-win-win-opportunity-for-the-city-of-london/

Remember also, London is a Global financial centre, not just a European one.

At the moment.
Florence, Siena, plenty of others have blown their market dominance through assuming their own indespensibility.

Medieval Italian cities - not very relevant comparisons.

No matter how much evidence I present to show the opportunities and upsides, you will still retain that losing mentality. It almost seems you want it to be that way.

orraloon

What relevance is all this blether about London based financial services upside / downside to the hard core gullible leave voters of Stoke, Sunderland and sh1tholes like that?

rjsterry

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

Kind of like toysrus being the middleman between toy companies and children. Except when toysrus gets into trouble customer and supplier can make a new connection through amazon argos or smythe toys. Londons Dominant position is not in perpetuity.

Nothing is forever, but it will take more than Brexit to change that. In fact there could well be longer term opportunities - even the Guardian thinks so.
https://www.theguardian.com/business/2015/sep/25/brexit-may-benefit-city-of-london-in-the-long-run-says-top-consultancy

https://blogs.lse.ac.uk/brexit/2017/09/08/brexit-is-a-win-win-opportunity-for-the-city-of-london/

Remember also, London is a Global financial centre, not just a European one.

Perhaps as you say, TBB needs to come back on this one. I see the point that Brexit offers an opportunity for regulatory divergence in FS, which could make things easier for the City. I also understand that the EU FS regs are drafted in an environment where FS are not the first priority and that therefore they currently don't entirely suit the City. But I'm still not clear how we would use this to extract some other concession from the EU. This seems to just be an argument that the City is better off outside the EU regs. Surely there needs to be something that we could withhold unless we get X.

rjsterry

orraloon wrote:

What relevance is all this blether about London based financial services upside / downside to the hard core gullible leave voters of Stoke, Sunderland and sh1tholes like that?

It pays for their public spending.

morstar

rjsterry wrote:

orraloon wrote:

What relevance is all this blether about London based financial services upside / downside to the hard core gullible leave voters of Stoke, Sunderland and sh1tholes like that?

It pays for their public spending.

Firstly, a lot probably don't care. If anything, some of them want others to suffer as they do.

Secondly, the assumption that they want public spending rather than jobs is a viewpoint. (I'm not excusing the fact that some of them could mobilise and get work but conversely, it is the job of government to facilitate productivity).

rick_chasey

orraloon wrote:

What relevance is all this blether about London based financial services upside / downside to the hard core gullible leave voters of Stoke, Sunderland and sh1tholes like that?

Some of us work there innit.

rjsterry

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

Kind of like toysrus being the middleman between toy companies and children. Except when toysrus gets into trouble customer and supplier can make a new connection through amazon argos or smythe toys. Londons Dominant position is not in perpetuity.

Nothing is forever, but it will take more than Brexit to change that. In fact there could well be longer term opportunities - even the Guardian thinks so.
https://www.theguardian.com/business/2015/sep/25/brexit-may-benefit-city-of-london-in-the-long-run-says-top-consultancy

https://blogs.lse.ac.uk/brexit/2017/09/08/brexit-is-a-win-win-opportunity-for-the-city-of-london/

Remember also, London is a Global financial centre, not just a European one.

At the moment.
Florence, Siena, plenty of others have blown their market dominance through assuming their own indespensibility.

Medieval Italian cities - not very relevant comparisons.

No matter how much evidence I present to show the opportunities and upsides, you will still retain that losing mentality. It almost seems you want it to be that way.

Venice has some relevance. Venice had control of nearly all trade coming from the Middle East into the Mediterranean by the 15th century and was the major financial centre in the renaissance. Then the Ottomans cut them off from incoming goods on one side and the Spanish and Portuguese worked out that you could get to the 'Indies' another way and within the space of 40 years that was that.

TheBigBean

rjsterry wrote:

Perhaps as you say, TBB needs to come back on this one.

Do I? On what, and would it serve any point?

rjsterry wrote:

I see the point that Brexit offers an opportunity for regulatory divergence in FS, which could make things easier for the City.

The City is better regulated than most of the other EU countries. Brexit could offer the opportunity to insist on a level playing field.

bobmcstuff

morstar wrote:

rjsterry wrote:

orraloon wrote:

What relevance is all this blether about London based financial services upside / downside to the hard core gullible leave voters of Stoke, Sunderland and sh1tholes like that?

It pays for their public spending.

Firstly, a lot probably don't care. If anything, some of them want others to suffer as they do.

Secondly, the assumption that they want public spending rather than jobs is a viewpoint. (I'm not excusing the fact that some of them could mobilise and get work but conversely, it is the job of government to facilitate productivity).

Presumably much of the public spending would manifest in jobs, no?

Boris' pledges on Northern infrastructure spending is very welcome and something the previous government should have done IMO. Not that I have much faith on his ability to deliver.

robert88

rjsterry wrote:

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

Kind of like toysrus being the middleman between toy companies and children. Except when toysrus gets into trouble customer and supplier can make a new connection through amazon argos or smythe toys. Londons Dominant position is not in perpetuity.

Nothing is forever, but it will take more than Brexit to change that. In fact there could well be longer term opportunities - even the Guardian thinks so.
https://www.theguardian.com/business/2015/sep/25/brexit-may-benefit-city-of-london-in-the-long-run-says-top-consultancy

https://blogs.lse.ac.uk/brexit/2017/09/08/brexit-is-a-win-win-opportunity-for-the-city-of-london/

Remember also, London is a Global financial centre, not just a European one.

At the moment.
Florence, Siena, plenty of others have blown their market dominance through assuming their own indespensibility.

Medieval Italian cities - not very relevant comparisons.

No matter how much evidence I present to show the opportunities and upsides, you will still retain that losing mentality. It almost seems you want it to be that way.

Venice has some relevance. Venice had control of nearly all trade coming from the Middle East into the Mediterranean by the 15th century and was the major financial centre in the renaissance. Then the Ottomans cut them off from incoming goods on one side and the Spanish and Portuguese worked out that you could get to the 'Indies' another way and within the space of 40 years that was that.

We used to have an empire and a bloody great navy. We were the world's greatest mercantile nation, East India Company and all that. See Navigation Acts 1651.

Now we are one of the world's greatest capitalist nations with no bloody great navy. Brexit will take us further towards capitalism, that's the whole idea. Capitalism benefits those with capital as does consumerism. It carries fewer overheads than mercantilism, e.g. taxes, so it does not like social expenditure.

rjsterry

TheBigBean wrote:

rjsterry wrote:

Perhaps as you say, TBB needs to come back on this one.

Do I? On what, and would it serve any point?

rjsterry wrote:

I see the point that Brexit offers an opportunity for regulatory divergence in FS, which could make things easier for the City.

The City is better regulated than most of the other EU countries. Brexit could offer the opportunity to insist on a level playing field.

Sorry, I've probably lost the thread of who was making which argument, so maybe that should be directed at Stevo. I think it was Stevo who suggested that our FS dominance could be used as leverage in future negotiations (assuming there are some either before or after 31/10). RC asked for a specific example and I think you suggested English Law. I can see that that offers potential advantages but I still don't see where the leverage is.

rjsterry

Robert88 wrote:

rjsterry wrote:

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

darkhairedlord wrote:

Stevo 666 wrote:

Stevo 666 wrote:

TheBigBean wrote:

Rick Chasey wrote:

What do they need to sell in London that they now can’t sell through Dublin or Lux or Paris or Frankfurt?

Be specific.

English law.

And sell financial services to a very large customer base in the City/UK. Pretty obvious really.

And if we follow Ricks logic then there wouldn't be much problem with UK firms not being able to sell in the EU, would there?

And the ability to raise capital efficiently in the world's largest capital market.

Here you go Rick, as mentioned. This gives us leverage.

Kind of like toysrus being the middleman between toy companies and children. Except when toysrus gets into trouble customer and supplier can make a new connection through amazon argos or smythe toys. Londons Dominant position is not in perpetuity.

Nothing is forever, but it will take more than Brexit to change that. In fact there could well be longer term opportunities - even the Guardian thinks so.
https://www.theguardian.com/business/2015/sep/25/brexit-may-benefit-city-of-london-in-the-long-run-says-top-consultancy

https://blogs.lse.ac.uk/brexit/2017/09/08/brexit-is-a-win-win-opportunity-for-the-city-of-london/

Remember also, London is a Global financial centre, not just a European one.

At the moment.
Florence, Siena, plenty of others have blown their market dominance through assuming their own indespensibility.

Medieval Italian cities - not very relevant comparisons.

No matter how much evidence I present to show the opportunities and upsides, you will still retain that losing mentality. It almost seems you want it to be that way.

Venice has some relevance. Venice had control of nearly all trade coming from the Middle East into the Mediterranean by the 15th century and was the major financial centre in the renaissance. Then the Ottomans cut them off from incoming goods on one side and the Spanish and Portuguese worked out that you could get to the 'Indies' another way and within the space of 40 years that was that.

We used to have an empire and a bloody great navy. We were the world's greatest mercantile nation, East India Company and all that. See Navigation Acts 1651.

Now we are one of the world's greatest capitalist nations with no bloody great navy. Brexit will take us further towards capitalism, that's the whole idea. Capitalism benefits those with capital as does consumerism. It carries fewer overheads than mercantilism, e.g. taxes, so it does not like social expenditure.

The point was more that a dominant position can change relatively quickly if circumstances allow. I doubt anyone predicted Columbus' discovery, much less the impact it had on the 'world order' of the time.

TheBigBean

rjsterry wrote:

TheBigBean wrote:

rjsterry wrote:

Perhaps as you say, TBB needs to come back on this one.

Do I? On what, and would it serve any point?

rjsterry wrote:

I see the point that Brexit offers an opportunity for regulatory divergence in FS, which could make things easier for the City.

The City is better regulated than most of the other EU countries. Brexit could offer the opportunity to insist on a level playing field.

Sorry, I've probably lost the thread of who was making which argument, so maybe that should be directed at Stevo. I think it was Stevo who suggested that our FS dominance could be used as leverage in future negotiations (assuming there are some either before or after 31/10). RC asked for a specific example and I think you suggested English Law. I can see that that offers potential advantages but I still don't see where the leverage is.

I suggested English law as something that couldn't be sold in "Dublin or Lux or Paris or Frankfurt". A product which relies on English law could be sold in these places, but it is not really optimal, as any redrafting, litigation or interpretation would then need an English law firm involved. English law is decent export for the country.

For example, if you take the ISDA master agreement, then there is a choice of English law or New York law, so when an FX option is sold in Paris it is likely one of these will be chosen. It is theoretically possible to select something else e.g. Luxembourg law, but as this wouldn't be standard, any party requesting it would pay a large premium and struggle with the sizing of the contract.

Finally, I think it just costs more to clear in other countries as banks are frequently back-to-backing the trades and each one requires a premium of some sort.

So, it is all possible, just more expensive. London may fall one day, but I can't see it being replaced because of EU protectionism which seems to be what's on offer.

rick_chasey

TheBigBean wrote:

rjsterry wrote:

TheBigBean wrote:

rjsterry wrote:

Perhaps as you say, TBB needs to come back on this one.

Do I? On what, and would it serve any point?

rjsterry wrote:

I see the point that Brexit offers an opportunity for regulatory divergence in FS, which could make things easier for the City.

The City is better regulated than most of the other EU countries. Brexit could offer the opportunity to insist on a level playing field.

Sorry, I've probably lost the thread of who was making which argument, so maybe that should be directed at Stevo. I think it was Stevo who suggested that our FS dominance could be used as leverage in future negotiations (assuming there are some either before or after 31/10). RC asked for a specific example and I think you suggested English Law. I can see that that offers potential advantages but I still don't see where the leverage is.

I suggested English law as something that couldn't be sold in "Dublin or Lux or Paris or Frankfurt". A product which relies on English law could be sold in these places, but it is not really optimal, as any redrafting, litigation or interpretation would then need an English law firm involved. English law is decent export for the country.

For example, if you take the ISDA master agreement, then there is a choice of English law or New York law, so when an FX option is sold in Paris it is likely one of these will be chosen. It is theoretically possible to select something else e.g. Luxembourg law, but as this wouldn't be standard, any party requesting it would pay a large premium and struggle with the sizing of the contract.

Finally, I think it just costs more to clear in other countries as banks are frequently back-to-backing the trades and each one requires a premium of some sort.

So, it is all possible, just more expensive. London may fall one day, but I can't see it being replaced because of EU protectionism which seems to be what's on offer.

I'm not really disputing that.

Back a few pages stevo wrote this:

Stevo 666 wrote:

I made the point before that access to the London financial markets is something that EU institutions will need. It gives us leverage when it comes to discussing our services exports - if necessary.

But I still don't understand how that leverage actually manifests.

To me it just seems like Brexit increases friction in the process of accessing UK markets from abroad, and it'll be up to customers who will see those friction costs passed on whether the extra cost is worth the advantage of English law or whatever.

Obviously level of friction is determined on what the future relation looks like long term, but that's not what I really think of as leverage with regard to the WA.

rjsterry

TheBigBean wrote:

rjsterry wrote:

TheBigBean wrote:

rjsterry wrote:

Perhaps as you say, TBB needs to come back on this one.

Do I? On what, and would it serve any point?

rjsterry wrote:

I see the point that Brexit offers an opportunity for regulatory divergence in FS, which could make things easier for the City.

The City is better regulated than most of the other EU countries. Brexit could offer the opportunity to insist on a level playing field.

Sorry, I've probably lost the thread of who was making which argument, so maybe that should be directed at Stevo. I think it was Stevo who suggested that our FS dominance could be used as leverage in future negotiations (assuming there are some either before or after 31/10). RC asked for a specific example and I think you suggested English Law. I can see that that offers potential advantages but I still don't see where the leverage is.

I suggested English law as something that couldn't be sold in "Dublin or Lux or Paris or Frankfurt". A product which relies on English law could be sold in these places, but it is not really optimal, as any redrafting, litigation or interpretation would then need an English law firm involved. English law is decent export for the country.

For example, if you take the ISDA master agreement, then there is a choice of English law or New York law, so when an FX option is sold in Paris it is likely one of these will be chosen. It is theoretically possible to select something else e.g. Luxembourg law, but as this wouldn't be standard, any party requesting it would pay a large premium and struggle with the sizing of the contract.

Finally, I think it just costs more to clear in other countries as banks are frequently back-to-backing the trades and each one requires a premium of some sort.

So, it is all possible, just more expensive. London may fall one day, but I can't see it being replaced because of EU protectionism which seems to be what's on offer.

Thanks. Mostly outside my experience but I'm certainly aware that parties to a contract can select which law applies; in my field it's normally only a choice between English or Scottish.

Stevo_666

rjsterry wrote:

TheBigBean wrote:

rjsterry wrote:

Perhaps as you say, TBB needs to come back on this one.

Do I? On what, and would it serve any point?

rjsterry wrote:

I see the point that Brexit offers an opportunity for regulatory divergence in FS, which could make things easier for the City.

The City is better regulated than most of the other EU countries. Brexit could offer the opportunity to insist on a level playing field.

Sorry, I've probably lost the thread of who was making which argument, so maybe that should be directed at Stevo. I think it was Stevo who suggested that our FS dominance could be used as leverage in future negotiations (assuming there are some either before or after 31/10). RC asked for a specific example and I think you suggested English Law. I can see that that offers potential advantages but I still don't see where the leverage is.

OK, here is link that demonstrates the point:

https://www.bba.org.uk/wp-content/uploads/2016/12/webversion-BQB-3-1.pdf
Page 7.

Overall the main point is the ability of EU institutions to access to finance from - and sell into - the very large UK FS market, as mentioned before. They don't want to lose that Clearly there are also impacts on the UK, but I am highlighting as requested the impact on EU based institutions.

Anyone who thinks that the relatively lightweight financial centres in the EU can just step in and offer the range of services, access to capital and pricing of that capital that The City of London can offer is being a bit optimistic in my view.