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How the City of London invented offshore banking

theguardian.com

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Re: How the City of London invented offshore banking

#11

Post by rmvt »

user5994461 wrote: post #9
Chyzwar wrote: post #6

Earlier quoted context omitted.

After Brexit, The City will lose passporting rights and It would lose a large portion of the EU market. Most of City banks are large multinational corporations that care very little about British politics. If anything Brexit was surprising for them as well. City banks are already moving to EU. JP Morgan is moving to Dublin, Frankfurt, Warsaw, Luxemburg. Goldman is moving to Frankfurt and Paris. EU will start applying…

>>> EU will start applying pressure to move City jobs to the continent. Brexit will destroy City and London in long-term. Short term is good so far. Rent did not increase last year and jobs have less candidates applying. People literally stop coming overnight since Brexit, there is less competition for everything. Long term, we will see. Probably nothing good. Working at one of these big banks, there are 10 000 emplo…

> It's delusional to think that they can be moved.

no. it's delusional to think otherwise, unless you're naive enough to think anyone actually means an office is moved overnight.

Re: How the City of London invented offshore banking

#12

Post by UncleEntity »

Interesting that they try to pin the failure of the Bretton Woods system on some shadowy backroom figures instead of 1) the US inflating the dollar well past the amount of gold backing it, 2) governments cashing in their dollars for gold @ $35/oz and making a profit by selling it on the international market for its true market value and 3) the French calling for a return to a true gold standard...because who doesn't like to blame the French?

My understanding of the main argument put forth in the article is that capital controls are the answer to global inequality?

Re: How the City of London invented offshore banking

#13

Post by user5994461 »

rmvt wrote: post #11
user5994461 wrote: post #9

Earlier quoted context omitted.

>>> EU will start applying pressure to move City jobs to the continent. Brexit will destroy City and London in long-term. Short term is good so far. Rent did not increase last year and jobs have less candidates applying. People literally stop coming overnight since Brexit, there is less competition for everything. Long term, we will see. Probably nothing good. Working at one of these big banks, there are 10 000 emplo…

> It's delusional to think that they can be moved. no. it's delusional to think otherwise, unless you're naive enough to think anyone actually means an office is moved overnight.

You're naive to think that thousands of people can't be relocated overnight. Historically, that came along war and starvation.

Hopefully, politicians are just messing around and not trying to go down that road.

Re: How the City of London invented offshore banking

#14

Post by theoh »

Havoc wrote: post #8
5ersi wrote: post #3

My theory is that The City was the primary force behind Brexit. They are by far the largest and most influential entity and one of the only few that are going to be better off after Brexit. Even more, staying in the EU would actually jeopardize their special tax-heaven status as EU was moving toward more banking regulation. Note: EU rules or laws, once accepted by local parliaments, have the status of international l…

huh? London voted purely in favour of remain. And due to loss of financial passporting etc will have the largest negative fall-out.

London did not vote "purely" in favour of remain. In fact, 40% of voters in London voted for Brexit. A lot of people have been romanticizing London as being liberal, multicultural, too worldly and dynamic to fall for Brexit. But 40% is, in fact, a lot, especially for something this dumb.

Re: How the City of London invented offshore banking

#15

Post by Lazare »

5ersi wrote: post #3

My theory is that The City was the primary force behind Brexit. They are by far the largest and most influential entity and one of the only few that are going to be better off after Brexit. Even more, staying in the EU would actually jeopardize their special tax-heaven status as EU was moving toward more banking regulation. Note: EU rules or laws, once accepted by local parliaments, have the status of international l…

Brexit has already been disastrous for The City, and it looks to become more so. It's practically the only thing that could unseat London as the premiere european finacial hub. Brexit is everything The City dreaded.

> They are by far the largest and most influential entity and one of the only few that are going to be better off after Brexit.

That is now what outside experts predict, nor is what the banks themselves are predicting, nor is it in line with how they are acting, nor is it matched by what has already taken place.

> staying in the EU would actually jeopardize their special tax-heaven status as EU was moving toward more banking regulation

First, I don't think you 100% understand what regulations are at issue here; there is no "special tax-heaven[sic] status".

But yes, there are rules changes coming that are designed to hamper The City and (not at all coincidentalyl) to push banks from London to Frankfurt. And inside the EU, the UK had some ability to lobby for tweaks to weaken or avoid these regulations. Outside they do not. This isn't a way for them to avoid this issue, this is a way to ensure that can't. For the bankers, Brexit is seen as an existential threat. Just look through the Brexit related headlines on, eg, Bloomberg. It's unmitigated doom, gloom, and panic.

From https://www.bloomberg.com/graphics/2017-brexit-bankers/:

> Frankfurt has emerged as the biggest winner in the fight for thousands of London-based jobs that will have to be relocated to new hubs inside the European Union after Brexit.

> Morgan Stanley, Citigroup Inc., Standard Chartered Plc and Nomura Holdings Inc have picked the German city for their EU headquarters to ensure continued access to the single market. Goldman Sachs Group Inc. and UBS Group AG are weighing a similar decision, said people familiar with the matter, asking not to be named because the plans aren’t public. HSBC Holdings Plc is the biggest non-French bank so far to opt for Paris, while Barclays Bank Plc has plumped for Dublin.

> London could lose 10,000 banking jobs and 20,000 roles in financial services as clients move 1.8 trillion euros ($2.1 trillion) of assets out of the U.K. on Brexit, according to think-tank Bruegel. The implications for the U.K. are substantial: finance and related professional services bring in some £190 billion ($248 billion) a year, representing 12 percent of the British economy.

Brexit is already gutting the UK financial sector, full stop.

Re: How the City of London invented offshore banking

#16

Post by Lazare »

UncleEntity wrote: post #12

Interesting that they try to pin the failure of the Bretton Woods system on some shadowy backroom figures instead of 1) the US inflating the dollar well past the amount of gold backing it, 2) governments cashing in their dollars for gold @ $35/oz and making a profit by selling it on the international market for its true market value and 3) the French calling for a return to a true gold standard...because who doesn't…

Yeah. Netting it down to the essence, the proposed explanation for the collapse of Bretton Woods seemed to be "USD inflation". Which is sure, plausible enough, I suppose.

Unfortunately they then threw up their hands, ignored everything we know about inflation in general or that inflationary period in specific, and come up with some weird story about how 70s stagflation was actually caused by South American dictators stashing money in Swiss bank accounts and then lending the money to the Italian government to build motorways.

A+ for imagination, but yeah, actually, the US just printed a ton of money. It's not a huge mystery!

> My understanding of the main argument put forth in the article is that capital controls are the answer to global inequality?

And yes, that was the other big weakness. Their argument for capital controls seems to mostly be "inequality was better when we had capital controls, so clearly capital controls caused lower inequality". There's no real attempt to outline a mechanism for this. There's an implication that capital controls allowed higher marginal taxes which in turn financed higher spending, but if you actually look at government spending, this is clearly nonsense. The UK has been spending between 35% and 45% of GDP on government since the 1950s, with no correlation between the start or end of Bretton Woods. Extremely high marginal tax rates may lead to good song lyrics, but they don't necessarily collect a lot of actual money.

Re: How the City of London invented offshore banking

#18

Post by Lazare »

user5994461 wrote: post #9
Chyzwar wrote: post #6

Earlier quoted context omitted.

After Brexit, The City will lose passporting rights and It would lose a large portion of the EU market. Most of City banks are large multinational corporations that care very little about British politics. If anything Brexit was surprising for them as well. City banks are already moving to EU. JP Morgan is moving to Dublin, Frankfurt, Warsaw, Luxemburg. Goldman is moving to Frankfurt and Paris. EU will start applying…

>>> EU will start applying pressure to move City jobs to the continent. Brexit will destroy City and London in long-term. Short term is good so far. Rent did not increase last year and jobs have less candidates applying. People literally stop coming overnight since Brexit, there is less competition for everything. Long term, we will see. Probably nothing good. Working at one of these big banks, there are 10 000 emplo…

> Working at one of these big banks, there are 10 000 employees for each building in canary wharf. It's delusional to think that they can be moved.

They're already being moved. The question is how many and how fast, not whether it can happen at all.

Re: How the City of London invented offshore banking

#19

Post by pcrh »

5ersi wrote: post #3

My theory is that The City was the primary force behind Brexit. They are by far the largest and most influential entity and one of the only few that are going to be better off after Brexit. Even more, staying in the EU would actually jeopardize their special tax-heaven status as EU was moving toward more banking regulation. Note: EU rules or laws, once accepted by local parliaments, have the status of international l…

The City was mostly for Remain. However, paradoxically, it is one of the sectors of the UK economy that will be least affected by it, as single market regulations don't cover services very broadly.

Note that UK financial regulations are usually more strict than EU ones (excepting some tax treatments).

Re: How the City of London invented offshore banking

#20

Post by ForFreedom »

5ersi wrote: post #3

My theory is that The City was the primary force behind Brexit. They are by far the largest and most influential entity and one of the only few that are going to be better off after Brexit. Even more, staying in the EU would actually jeopardize their special tax-heaven status as EU was moving toward more banking regulation. Note: EU rules or laws, once accepted by local parliaments, have the status of international l…

who/what is the "The City"?
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