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Brexit What Happens Next Thread ---multiple merged threads.


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2 hours ago, Confusion of VIs said:

I think that at least some of the post seems rather complacent, assuming that the EU will accept  brass plate subsidiaries is wrong. They are going to require that the subsidiaries are effectively standalone operations. 

The moment he suggested there was only one Euro clearing house I got the impression he wasn't speaking with any decent authority on the subject unfortunately.

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I do.   https://twitter.com/housepricemania

1409 pages....you guys should have your own forum !!!

Oh OK. Shame that really, but hey it looks like @IMHAL helped us both out. Nice repost though, thanks ! Any thoughts ?  

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5 minutes ago, HairyOb1 said:

The moment he suggested there was only one Euro clearing house I got the impression he wasn't speaking with any decent authority on the subject unfortunately.

Hmmm... sometimes one can just tell when someone knows what they're talking about IMO. LCH seems by far the most significant one: http://bruegel.org/2016/06/brexit-and-the-uks-euro-denominated-market-the-role-of-clearing-houses/

Quote

Of the three clearing houses, LCH Ltd. has by far the biggest share of the euro-denominated market operating from the UK. Through its SwapClearservice, unlike the CDSClear (credit default swaps) and part of RepoClear market located in Paris, it clears more than 50% interest rate contracts and represents 95% of the cleared OTC interest rate swap (IRS) market.

But anyway, the city's dependence on the UK legal system is the important point, and how difficult it would be to replicate the whole legal system in a foreign country.

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7 minutes ago, highYield said:

Hmmm... sometimes one can just tell when someone knows what they're talking about IMO. LCH seems by far the most significant one: http://bruegel.org/2016/06/brexit-and-the-uks-euro-denominated-market-the-role-of-clearing-houses/

But anyway, the city's dependence on the UK legal system is the important point, and how difficult it would be to replicate the whole legal system in a foreign country.

There are more than 3, as I said, I listed 5 off the top of my head.

This is 40% of the moolah London makes in financial dealing, be that trading or clearing.  40%.

The city depends on the UK legal system, not the EU, the city.  The Cities legal system has to be EU compliant, one of the reasons they'll lose trade.  It's fog, smoke that is being cast about to put pressure on folk not to remove London position that's all.  It isn't any great shakes to replace this, given Euro clearing also happens across the European finance centres...

Again, as I said, soft losses too:

Quote

Just 1,000 people or so work at the London Clearing House. But a report by EY, the professional services firm, concluded last year that the loss of all euro-denominated clearing could result in the loss of 83,000 City jobs, once lawyers, accountants and IT professionals elsewhere are included.

Has a row like this happened before?

Yes. The European Central Bank (ECB) has previously sought to insist that all euro-denominated trades are cleared in the eurozone. Britain challenged this at the European Court of Justice (ECJ) in Luxembourg in 2015 and won.

So why can't Britain just go to the ECJ again?

Because the ECJ only ruled against the ECB on the grounds that it was illegal to discriminate against another EU member state. The UK will no longer be able to rely on that protection once it has left the EU.

 

Edited by HairyOb1
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36 minutes ago, highYield said:

Hmmm... sometimes one can just tell when someone knows what they're talking about IMO. LCH seems by far the most significant one: http://bruegel.org/2016/06/brexit-and-the-uks-euro-denominated-market-the-role-of-clearing-houses/

But anyway, the city's dependence on the UK legal system is the important point, and how difficult it would be to replicate the whole legal system in a foreign country.

You need to take account of moving EU related finance work from London back into the EU is in large part a political aim.

It may not be  cost effective in the short/medium term but it is seen as a long term essential for the health and development of the Eurozone.

 

 

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18 minutes ago, Confusion of VIs said:

You need to take account of moving EU related finance work from London back into the EU is in large part a political aim.

It may not be  cost effective in the short/medium term but it is seen as a long term essential for the health and development of the Eurozone.

You need to take account that Brexit is in large a political aim.

It may not be  cost effective in the short/medium term but it is seen as a long term essential for the health and development of the UK.

:)

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6 minutes ago, highYield said:

You need to take account that Brexit is in large a political aim.

It may not be  cost effective in the short/medium term but it is seen as a long term essential for the health and development of the UK.

:)

:D:D

Lovely retort. Top notch.

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9 minutes ago, highYield said:

You need to take account that Brexit is in large a political aim.

It may not be  cost effective in the short/medium term but it is seen as a long term essential for the health and development of the UK.

:)

Not sure about that the politicians and political classes would dump it tomorrow if they could.

I would categories it  more as a revolution of the dispossessed.

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13 minutes ago, Confusion of VIs said:

Not sure about that the politicians and political classes would dump it tomorrow if they could.

Yep, which is why I'd vote Brexit again [edit: politics is not the sole preserve of politicians - they're just people who have nothing more useful to do in their lives than to try and boss other people around - in the whole, charming idiots]

13 minutes ago, Confusion of VIs said:

I would categories it  more as a revolution of the dispossessed.

So would I. Unfortunately, it appears that the majority of people in the UK are dispossessed.

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35 minutes ago, Confusion of VIs said:

Not sure about that the politicians and political classes would dump it tomorrow if they could.

I would categories it  more as a revolution of the dispossessed.

Ah - so based on this I presume you are a big fan of Brexit ? 

:D

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3 minutes ago, Unexpected said:

Yet some on here seem to think Brexit is neoliberal plot to pillage the UK.

Nah..it's definitely a hodge-podge of the dispossessed.  Those that globalisation has left behind mixed in with grubby load of Xenophobia, add in a cheeky twist of nationalism and finish with a topping of nostalgia for empire past. Viola!

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1 minute ago, IMHAL said:

Nah..it's definitely a hodge-podge of the dispossessed.  Those that globalisation has left behind mixed in with grubby load of Xenophobia, add in a cheeky twist of nationalism and finish with a topping of nostalgia for empire past. Viola!

Yeah, **** the dispossessed majority - we need to trust the politicians and the political classes - they have our best interest at heart - they told us so, after all.

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On 29/11/2017 at 12:20 PM, HairyOb1 said:

Three-quarters of euro-denominated business is cleared by houses in London, providing the city with 83,000 jobs and up to £80billion per year.

London currently clears £747billion worth of euro-denominated contracts every day, or three quarters of the global total.

Are you saying there's only one recognised clearing house in London?  If so, you bring the next statement under questions, as it's demonstrable there's far more, I can name 5 off the top of my head: CME, Euroclear, ICE, LCH and LME.

I don't think you know what you're on about, sorry, but everything I read clearly debunks what you're saying.

I am saying that around 40% of London's financial centre moolah comes form clearing, given that's about £80bn, it works out about 40% of our total money made in london and if we're losing that, it's a substantial amount of money.

Around 5,500 firms registered in the UK rely on the European Union's passporting rights for the financial services sector, and they turn over about £9 billion in revenue.

You've not even mentioned the potential loss of passporting, which is for all Euro denominated trades leaving the City too.  There are plenty of links saying Asset and Wealth management jobs will move from London in the event of a hard brexit too.

Sorry, but I have to call you up on this

 

No need to be sorry, happy to discuss this further. 

I originally replied to your post to challenge your claim that all euro trading would be effectively banned outside the EU. Clearing is a different thing entirely, trading is trading, clearing is a post trade event.

However I will address your points on clearing one more time. I only mention LCH as worthy of discussion (I'm well aware of the other clearers) as we are talking primarily about the clearing of Euro denominated interest rate derivatives.  The £747 billion of notional euro is almost all cleared by LCH. CME has almost no euro derivatives clearing in London, in fact they are closing down their CCP this year. Hardly anyone clears euro IRD's through Eurex apart from a few regional European banks who insist on it. Prior to clearing becoming mandatory, a dealer bank would just quote a price. Now they will quote it "LCH clear only" which pretty much forced all the smaller European banks to become members of LCH or use a clearing agent there anyway despite their preference for Eurex clearing. ICE are primarily a buy side clearer which is tiny compared to the dealer to dealer volume of the market that goes through LCH. LME is a metal exchange, I don't think they clear IRS as they are not an authorised CCP under ESMA to clear IRD's.

Now, knowing LCH is the bulk of the derivatives clearing business and if I was thinking of how to quantify any potential loss of this business, I would look at them first. So when you only see 373m euro of revenues across all currencies I have to question a figure of £80 bn. Who are these firms doing multiples of the clearing business of LCH and if they exist we should easily be able to find their accounts and corroborate these figures. All your links show is a headline figure  with no evidence to back it up. Those of us who work in the business naturally question these figures because they don't align with our experience. The 3 major IDB's (BGC, Tullett/ICAP and Tradition) match almost all of the pan european IRD trades and send them all to the clearers on the bank's behalf through Markitwire confirmation platform so we have good visibility of the volumes. These can also be checked at the trade repository's which breakdown by instrument, currency and clearing house. Can you tell me whose these firms are and any accounts that can be scrutinised to come up with this £80 bn figure? 

Now back to trading and specifically OTC trading.

"You've not even mentioned the potential loss of passporting, which is for all Euro denominated trades leaving the City too."

What does this actually mean because it doesn't make much sense.

What does passporting have to with trading? How does Goldmans New York trade 5yr Euro IRS with Citibank London when it has no 'passport'? How does Nomura Tokyo trade 2yr Euro FRA with BNP Paris when it has no passport? How do Citibank Singapore and Mizuho Tokyo trade euro IRS with each other when they're not even in the EU territory? Derivatives OTC Trades are primarily (about 5% is exchange traded) private contracts between market participants than can and are traded anywhere in the world. That's why I challenged your original assertion that there is a proposal to ban euro denominated trading outside the EU, that it is actually enforceable, and that it makes little sense if you want the Euro to be a functioning global reserve currency or one to conduct international trade with.

You have never directly addressed this original question because I don't think you actually know or understand how OTC trading works. You keep diverting to clearing which is a sideshow in terms of volumes and revenues to OTC trading.  

In more general terms, I actually agree with you that the City will permanently lose some business, this much is obvious. But I find some of the figures quoted like 80bn just from clearing to be bullsh.t, sorry.

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7 hours ago, Confusion of VIs said:

Part of the suggested deal was no tax for 20 years.

The reality is that there will be a carrot and stick approach. It dawned recently on the firm I am working for that the EU are going to set the bar very high for firms needing to have a base in the EU post Brexit, so now we are planning for having to move all of the decision makers plus supporting staff and back office functions. It is pretty clear that the intention is that over time the EU base should become the head office with a UK subsidiary rather than the other way around.   

One of the most basic decisions that one can take is where to live. If a person has to acquiesce to another's decision as to where they must live, then they are not a decision maker, but a decision taker.

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2 hours ago, IMHAL said:

Nah..it's definitely a hodge-podge of the dispossessed.  Those that globalisation has left behind mixed in with grubby load of Xenophobia, add in a cheeky twist of nationalism and finish with a topping of nostalgia for empire past. Viola!

You forgot older, stupid, poorly educated bigots.

’bingo’.

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2 hours ago, highYield said:

Yeah, **** the dispossessed majority - we need to trust the politicians and the political classes - they have our best interest at heart - they told us so, after all.

They would be our politicians.... the ones we will be left with when the brexit 'party' is over. The EU is a mear diversion. Hey ho if it gets rid of the frustration ......

F..in ipad drivin me up the wall.

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1 minute ago, IMHAL said:

They would be our politicians.... the ones we will be left with when the brexit 'party' is over. The EU is a mear diversion. Hey ho if it gets rid of the frustration ......

F..in ipad drivin me up the wall.

From https://www.theipadguide.com/faq/how-can-i-turn-ipad-autocorrect

To turn auto correct off:

1. Navigate to Settings -> General -> Keyboard

2. Touch Auto-Correction -> OFF

:)

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EU nationals shunning Britain accounted for much of the change, with net migration from the bloc dropping by 43 percent to 107,000. The 82,000 decline was larger than in any quarter since at least 2010. EU immigration fell by 54,000 to 230,000 and emigration rose by 28,000 to 123,000, the highest since 2008. Bloomberg

EU nationals are going the Brexit way.

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2 hours ago, rollover said:

 

More trouble ahead for Tories.

PMSL. The Brexitard turkeys who voted for Christmas and the Tories really are turning Brexit into a comedy of errors. To make this kind of nasty xenophobic nonsense up your really need to be subintelligence. 

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5 hours ago, ccc said:

Ah - so based on this I presume you are a big fan of Brexit ? 

:D

I am a fan of whatever works for the UK.

Despite looking hard for a credible vision of a successful Brexit, including reading +1300 pages of this thread, I haven't found one yet (I have discounted ideas such as it represents change and as things couldn't possibly get worse that must be a good thing and Minford's mathematically challenged forecasts).

So at the moment I am not a fan of Brexit, but feel free to convince me otherwise with a well argued case for how it will deliver prosperity to the average UK citizen.   

    

 

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  • 441 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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