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Brexit 101

  #501 (permalink)
 
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Obviously the EU doesn't want to give the UK a sweet deal and encourage other countries to do the same, but isn't it also in their best interest to have a deal going forward as well. While I understand why the EU wants to do this in series, it actually makes sense for both sides to do it in parallel.

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  #502 (permalink)
 
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SMCJB View Post
Obviously the EU doesn't want to give the UK a sweet deal and encourage other countries to do the same, but isn't it also in their best interest to have a deal going forward as well. While I understand why the EU wants to do this in series, it actually makes sense for both sides to do it in parallel.

I don't know what 'disentangling the existing relationship' entails, so I'm unable to comment.

The press will educate us soon enough, and I hope with not too much bias.


All I can say is that for a relationship so complex and which has existed for nearly 45 years, 2 years of negotiations seem actually not enough.

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  #503 (permalink)
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xplorer View Post
I think the key is understanding how EU representatives such as Merkel, Tusk and Juncker can best meet May in the middle when it comes to UK exit negotiations.

It's a careful balance between safeguarding EU citizens' interests on one hand and UK citizens' on the other.

I don't see a reason for negotiations to get nasty as probably both sides would suffer, but if May thinks the UK is going to come out better off I fear she's in for a disappointment.

Considering that a lot of financial institutions are already considering moving at least part of their operations to Europe I think you are right. Who knows which other industries are considering relocating their operations...

Looking at the potential uncertainty, I can understand why businesses are being pro-active in looking for other solutions.

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@grausch

You've probably read it already. If not, check this out ( complete article in The Guardian)

Donald Tusk’s letter setting the terms for negotiating the UK’s departure from the EU was the moment when Theresa May’s rhetoric collided with reality, according to a string of politicians who have been warning against a hard Brexit.

Chris Leslie, the former shadow chancellor, said the letter by the president of the European council marked the emergence of “the cold, hard realities of modern international trade and diplomacy after all the talking to ourselves for the last nine months”.

He said some of the worrying aspects were “ruling out staying in the single market, and the no-go on sector-by-sector deals and the ban on trying to go round the commission to different heads of state is a pretty firm message, almost like they are going to police it”.

Tim Farron, the Liberal Democrats’ leader, whose party is leading the political fight against Brexit, said: “The terms are clear: no sector-by-sector deals, no bilateral negotiations and no new trade deal until the withdrawal terms are agreed. This leaves no doubt that David Davis’s comments about special arrangements for the car industry or financial sector are worthless.”

A number of Conservatives were also concerned about the surprise mention of Gibraltar in the draft guidelines, making clear that any future arrangement would not apply to the rock unless agreed by both Spain and Britain. Bob Neill, a Tory MP and former minister, said: “It is the type of thing you might expect in terms of their start position. But just proves the so-called hard Brexiteers who thought this might be simple are in for a pretty tough reality check.”


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An hard Brexit was expected and it will hurt both economies (but much worst for UK than for the 27).
The single small positive aspect is that the "no Europe" guys will clearly see the consequences of not being in.
I'm not sure what they are going to do with the Irish border...

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The future of an estimated 100,000 jobs has been plunged into doubt after a close political ally of the German chancellor, Angela Merkel, and president of the European commission, Jean-Claude Juncker, warned that a prized sector in the City of London must relocate to EU soil after Brexit.

Manfred Weber, the leader of the centre-right European people’s party – the largest political group in the European parliament, to which both the German chancellor and the commission president belong – told reporters that euro-denominated clearing could no longer be undertaken in the City when the UK leaves the EU.

“EU citizens decide on their own money,” Weber said during a press conference in Strasbourg on Tuesday. “When the UK is leaving the European Union it is not thinkable that at the end the whole euro business is managed in London. This is an external place, this is not an EU place any more. The euro business should be managed on EU soil.”

Such a development would be a huge blow to the British economy. Six months ago, the head of the London Stock Exchange, Xavier Rolet, said at least 100,000 positions could be lost if the City’s clearing houses lost their ability to process euro-denominated transactions.

Clearing houses are independent parties that sit between the two parties in a trade and are tasked with managing the risk if one side defaults on payment. London clears around three-quarters of all euro-denominated trades.


Full article on The Guardian

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sam028 View Post
I'm not sure what they are going to do with the Irish border...

Ahh yes, that will reopen a can of worms that plagued the UK for decades! Also what if the Scots do succeed. You'll then need a border with Scotland as well. If not you lose all the immigration control you hoped to gain through the process.


xplorer View Post
The future of an estimated 100,000 jobs has been plunged into doubt after a close political ally of the German chancellor, Angela Merkel, and president of the European commission, Jean-Claude Juncker, warned that a prized sector in the City of London must relocate to EU soil after Brexit.....

I think it was pretty obvious that was going to happen and foolish for people to think it wouldn't.

For almost a year now we've had the pro-exit people, (mockingly) questioning where all the calamitous events that were predicted were. I fear they are about to find out.

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I'm not sure what they are going to do with the Irish border...


No, indeed. But in a way the Gibraltar border might be even more of a problem.

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A gap in EU financial rules is allowing member countries to compete to host the trading operations of London-based investment banks after Brexit by offering looser regulatory standards.

The European Central Bank is the euro zone's banking supervisor but, under EU law, does not have direct responsibility for the divisions of banks that conduct most of their market trading – broker-dealers – even though they are some of the most complex and riskiest parts of their businesses.

This is largely because when the ECB became responsible for euro zone supervision in 2014 the bulk of broker-dealers were in London and therefore not under its purview.

This means banks now looking to relocate these operations, to continue to trade continental securities after Britain leaves the EU, will have businesses approved and supervised by the national markets regulator of whichever country they move to.

Countries hoping to lure banks to their financial centers after Brexit are offering differing regulatory standards, raising fears at the ECB that they could be subject to light touch supervision and undermining its aim of making financial regulation consistent across the bloc.

Such inconsistencies mean broker-dealers trading the same markets in Europe could be subject to different regulatory requirements and raise the prospect that some would take on more risks than other regulators would deem appropriate.

"Regardless of balance sheet size, it's currently the national regulators who will have the authority to approve and regulate the broker-dealers. That is raising concerns of inconsistencies emerging," said Vishal Vedi a partner at Deloitte who is advising banks on how they will need to reorganize as a result of Brexit.

Across the euro zone, the likes of Frankfurt, Dublin, Luxembourg and Madrid are vying to lure banks, hoping to benefit from the tax revenues and jobs they would bring.




Full article on Reuters

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The prospect of lighter regulation probably increases the exodus from London.

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