$1T is leaving Britain because of Brexit • Hacker News Board

Re: $1T is leaving Britain because of Brexit

#31

Post by hkt » Mon, Jan 07, 2019, 4:41 PM UTC

sabertoothed wrote: post #15

GreaterFool wrote: post #10

> have shifted at least £800 billion ($1 trillion) worth of assets out of the country And what's the significance of that? Suppose I had $100 in a bank in UK and I moved it to a bank in Germany. Neither country is better or worse because of that. The article doesn't bother to explain the ramifications. Deals are made in UK because English law is really, really good. Having to maintain offices in EU will surely increa…

> Deals are made in UK because English law is really, really good. Can you elaborate?

We have reliable courts which are known for their independence.

We also have alternatives to courts - called Alternative Dispute Resolution mechanisms - which operate out of London mostly, and are known to be free of political interference etc.

See http://www.lcia.org/ for an example. You'd write an ADR into a contract and use these people if you didn't want to use our courts. And our courts respect this arrangement if it is agreed upon and treated properly. It's often used between parties even where nobody involved is a British company or person.

Re: $1T is leaving Britain because of Brexit

#32

Post by jen20 » Mon, Jan 07, 2019, 4:43 PM UTC

pc86 wrote: post #20

arethuza wrote: post #17

Earlier quoted context omitted.

"real estate will become a little more affordable" For many people in the UK any decrease in house prices is regarded as a very bad thing indeed.

Only for people using real estate as an investment or their primary store of wealth.

In 2015-16, 62.9% of UK households were owner-occupied. A drop in house prices (which would be incredibly welcome for me, as a prospective purchaser!) would lead to negative equity for a significant number of voters in the south east and especially the south west - no political party wants to own that, though both major parties in the UK bear responsibility for it.

Re: $1T is leaving Britain because of Brexit

#33

Post by tejaswiy » Mon, Jan 07, 2019, 4:43 PM UTC

GreaterFool wrote: post #10

> have shifted at least £800 billion ($1 trillion) worth of assets out of the country And what's the significance of that? Suppose I had $100 in a bank in UK and I moved it to a bank in Germany. Neither country is better or worse because of that. The article doesn't bother to explain the ramifications. Deals are made in UK because English law is really, really good. Having to maintain offices in EU will surely increa…

Presumably that means less jobs in the UK and more jobs in the EU to manage that wealth for one. I'm not sure what that means for future growth of the UK financial services industry.

Re: $1T is leaving Britain because of Brexit

#34

Post by matthewmacleod » Mon, Jan 07, 2019, 4:43 PM UTC

lazyjones wrote: post #14

myrandomcomment wrote: post #5

No surprise. Passporting (allow banks to operate in all members of the EU if they are licensed in one member) is a key to all of the banks operations. Every bank based in London for that purpose now has to open a regulated branch in an EU member. The next thing to kill the market in London will be the movement of Euro clearing to an EU member. Brexit is a self inflicted shot to the head. The number of people that sup…

> Every bank based in London for that purpose now has to open a regulated branch in an EU member. How many of them don't have one yet? Also, every bank based in the EU will have to open a regulated branch in UK in order to operate in this large market. > The number of people that supported leave and lacked understanding of all the ties of the businesses that operate in the UK but sell in the EU was amazing. Perhaps t…

Perhaps they're just not trying to see only the drawbacks and ignore successful non-members in Europe like Switzerland and Norway.

That's a bit of a misrepresentation, because those "successful non-members" are members of the single market, which is currently something that the UK is actively trying to leave.

Don't underestimate what's happening here – it would have been possible to execute Brexit in a relatively controlled manner, but that wasn't done, and now the UK is rapidly heading towards a pretty unpleasant outcome.

Re: $1T is leaving Britain because of Brexit

#35

Post by orf » Mon, Jan 07, 2019, 4:43 PM UTC

pc86 wrote: post #20

arethuza wrote: post #17

Earlier quoted context omitted.

"real estate will become a little more affordable" For many people in the UK any decrease in house prices is regarded as a very bad thing indeed.

Only for people using real estate as an investment or their primary store of wealth.

Which is everyone with a house, yes. The housing ladder is a huge thing here.

Re: $1T is leaving Britain because of Brexit

#36

Post by marliechiller » Mon, Jan 07, 2019, 4:44 PM UTC

arethuza wrote: post #17

lazyjones wrote: post #12

Is that good or bad news for Britons? Most tangible assets won't be leaving any time soon and nobody but banks will miss this amount in the banks' accounts. It's very likely that real assets, like real estate will become a little more affordable. Car registrations fell here in Austria as well, despite good economic indicators, it's not a big deal.

"real estate will become a little more affordable" For many people in the UK any decrease in house prices is regarded as a very bad thing indeed.

"real estate will become a little more affordable"

For many people in the UK any decrease in house prices is regarded as a very good thing indeed. (perhaps i'd be able to finally afford a property!)

Re: $1T is leaving Britain because of Brexit

#37

Post by onetimemanytime » Mon, Jan 07, 2019, 4:44 PM UTC

GreaterFool wrote: post #10

> have shifted at least £800 billion ($1 trillion) worth of assets out of the country And what's the significance of that? Suppose I had $100 in a bank in UK and I moved it to a bank in Germany. Neither country is better or worse because of that. The article doesn't bother to explain the ramifications. Deals are made in UK because English law is really, really good. Having to maintain offices in EU will surely increa…

>>And what's the significance of that? Suppose I had $100 in a bank in UK and I moved it to a bank in Germany. Neither country is better or worse because of that. The article doesn't bother to explain the ramifications.

Ummm...the German bank can loan or invest about $85-$90 of that. The British bank has to loan about the same amount less. When you talking trillions it ads up. Generally you want banks with a lot of deposits.

Re: $1T is leaving Britain because of Brexit

#38

Post by cm2187 » Mon, Jan 07, 2019, 4:44 PM UTC

myrandomcomment wrote: post #5

No surprise. Passporting (allow banks to operate in all members of the EU if they are licensed in one member) is a key to all of the banks operations. Every bank based in London for that purpose now has to open a regulated branch in an EU member. The next thing to kill the market in London will be the movement of Euro clearing to an EU member. Brexit is a self inflicted shot to the head. The number of people that sup…

> Every bank based in London for that purpose now has to open a regulated branch in an EU member

nitpicking but these are unlikely to be branches but rather subsidiaries. London banks will still be able to have branches in the EU to clear EUR payments and access the ECB but are unlikely to be able to do any regulated activity (selling financial products, taking deposits or writing mortgages) out of these branches.

Re: $1T is leaving Britain because of Brexit

#39

Post by flexie » Mon, Jan 07, 2019, 4:45 PM UTC

GreaterFool wrote: post #10

> have shifted at least £800 billion ($1 trillion) worth of assets out of the country And what's the significance of that? Suppose I had $100 in a bank in UK and I moved it to a bank in Germany. Neither country is better or worse because of that. The article doesn't bother to explain the ramifications. Deals are made in UK because English law is really, really good. Having to maintain offices in EU will surely increa…

When it comes to financial legislation applying to banking, to securities trade etc., English law is largely whatever EU law says it is (it's regulated by the EU). It still remains to be seen what English law will be after Brexit.

As for rule of law in general, it's debatable whether its better in the UK than in the other Western or Northern European nations.

Re: $1T is leaving Britain because of Brexit

#40

Post by Fordec » Mon, Jan 07, 2019, 4:46 PM UTC

pc86 wrote: post #20

arethuza wrote: post #17

Earlier quoted context omitted.

"real estate will become a little more affordable" For many people in the UK any decrease in house prices is regarded as a very bad thing indeed.

Only for people using real estate as an investment or their primary store of wealth.

With the home ownership rate in the UK at 63.5%.

Combined with only 19% of the population (never mind more stock value than their primary residence value) owning any stock, stock ownership among the general population there is not like the US.

That basically means some majority of people there at least are using real estate as their primary store of wealth.