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

Re: $1T is leaving Britain because of Brexit

#41

Post by gumby » Mon, Jan 07, 2019, 4:46 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.

Norway and Switzerland are subject to almost all the EU regulations but unlike the UK have no say, much less veto, in the making or enforcement of those rules. Is that situation really what Brexiteers wanted?

Re: $1T is leaving Britain because of Brexit

#42

Post by cm2187 » Mon, Jan 07, 2019, 4:47 PM UTC

mbrumlow wrote: post #6

Lots of things are going to change. Things worked before the EU. I am sure things will continue to work after the exit.

And London was a major financial centre well before the creation of the EU.

Re: $1T is leaving Britain because of Brexit

#43

Post by dheelus » Mon, Jan 07, 2019, 4:47 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…

It is significant because shifting the money entails the eventual shifting of the revenue associated with the money. A large portion of revenue for capital is through traditional means such as interest rate arbitrage (difference between lending and borrowing rates) and services. It's only a matter of time before the services start moving to the continent.

Re: $1T is leaving Britain because of Brexit

#44

Post by ryan_j_naughton » Mon, Jan 07, 2019, 4:47 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…

Your seriously misunderstand the banking sector's very real impacts on everyday lives.

Having more assets under management is very impactful because money doesn't just sit in a bank -- it is used again for other things. Thus, there would be less money for loans and other investments.

If you're trying to get a mortgage or start a business, that's very impactful.

If you are a construction worker and financing for new commercial real estate is down, that's impactful.

If you're a factory worker and the factory can't get access to capital to launch a new product line.

All very real impacts.

Re: $1T is leaving Britain because of Brexit

#45

Post by matthewmacleod » Mon, Jan 07, 2019, 4:49 PM UTC

mbrumlow wrote: post #6

Lots of things are going to change. Things worked before the EU. I am sure things will continue to work after the exit.

I hate this argument with a passion. Yes, things will continue to "work". That's an incredibly low bar, though. It's quite possible that if the worst happens, there will be a substantial number of deaths and long-term, lingering economic damage. It could potentially take decades to recover economically, and have relatively little if any upside.

Re: $1T is leaving Britain because of Brexit

#46

Post by benj111 » Mon, Jan 07, 2019, 4:49 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…

$1T not being managed by uk paid (and taxed) employees. I assume the UK gains soft power, and probably financially gains from money kept in the UK (think bonds, overnight lending etc).

Re: $1T is leaving Britain because of Brexit

#47

Post by jotm » Mon, Jan 07, 2019, 4:50 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…

Suppose you have 50 million in your UK bank, then move it to Germany. Now that UK bank has less money to work with (lend, invest, credit, etc). That's how I see it.

Re: $1T is leaving Britain because of Brexit

#48

Post by stuaxo » Mon, Jan 07, 2019, 4:51 PM UTC

flexie wrote: post #39

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.

A lot of the what the "EU says it is" was significantly influenced by what the UK wanted it to be, especially when it comes to finance.

Re: $1T is leaving Britain because of Brexit

#49

Post by vmarsy » Mon, Jan 07, 2019, 4:52 PM UTC

hkt wrote: post #31

sabertoothed wrote: post #15

Earlier quoted context omitted.

> 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…

So this is like Arbitration in the US?

In the UK, how are they "known to be free of political interference etc."?

Is it easy for people to contest a decision that looks unfair and bring it to the regular courts ?

Re: $1T is leaving Britain because of Brexit

#50

Post by lazyjones » Mon, Jan 07, 2019, 4:52 PM UTC

SmellyGeekBoy wrote: post #21

lazyjones wrote: post #14

Earlier quoted context omitted.

> 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…

The UK is the 5th biggest economy in the world. Switzerland is 20th and Norway 30th. The UK has traditionally punched well above its weight economically, it will be interesting to see if we become just another Switzerland or Norway after Brexit rather than the world economic power that we are today. Being the banking capital of the EU is a huge contributing factor to that position, btw.

> The UK has traditionally punched well above its weight economically

How is its trade balance doing lately? Not so good.

https://tradingeconomics.com/united-kingdom/balance-of-trade

> Being the banking capital of the EU is a huge contributing factor to that position, btw.

I'm not sure what economic indicators you are talking about. Certainly none that reflects the actual well-being of the population.