Posted on 07/19/2016 1:54:52 PM PDT by ameribbean expat
Barclays and Bank of America Merrill Lynch could shift their markets business to Dublin, while Goldman Sachs has subsidiaries in Paris and Frankfurt it could use to keep its access to the 27-member single market once the UK officially leaves the European Union, according to the note. JP Morgan could shift resources to Luxembourg, where it has a subsidiary. ... Under EU law at the moment, European banks can operate branches in the UK that do not need to be separately capitalised from the parent company abroad. Similarly, non-EU banks can use their London subsidiary to sell services to clients across the EU.
The use of this bank “passport,” which allows banks in London to access to the EU single market of 28 nations, could come to an end after the Brexit vote.
(Excerpt) Read more at businessinsider.com.au ...
I’m certain some bank will be more than glad to step in and accept Britons’ deposits if these banks don’t want them.
I am sure that initially banks will leave England but as the EU circle the toilet drain the banks will leave Europe back to Brittan.
Under EU law at the moment, European banks can operate branches in the UK that do not need to be separately capitalised from the parent company abroad.”
I hope someone will forgive me if this is a stupid question. But if the net effect of this is that UK banks now have to be capitalized, and EU banks now have to be capitalized, even if both are under the same flag....well...isn’t that better b/c now the London banks are protected in the event of a crisis, at least a little bit? (Or vice versa, which is unlikely....since those Greek and Italian banks are likely to topple).
Doesn’t that make sense? Or am I missing something? How is having more capital bad for a bank? (Yes, it’s onerous and it slows down lending and raises its cost....but is that so bad right now, when interest rates are 0?)
The money isn’t in deposits, it’s in investment banking. Any money-center bank would prefer to be in Dublin or Frankfurt over an isolated UK.
or not
London has so much experience in offshore banking that it would not be wise to bet against The City. If the continent plays hardball the UK can drop its tax rates and set itself up as Switzerland. That said...
http://www.straitstimes.com/world/europe/eu-chief-donald-tusk-calls-for-brexit-velvet-divorce
Once the politicians get off the stage, things will get sorted. European business wants to retain access to a major market, as do UK banks. The jobs at stake in both instances will get the pols attention.
London is the No. 2 financial center in the world. Banks aren’t leaving London to set up operations in Podunk, Germany. The article is EU BS and propaganda.
A vote of confidence from Wells Fargo:
The UK’s new breed of digital challenger banks: Atom, Mondo, Starling and Tandem - Ranked
“... a new breed of digital-first, mobile-only banks are starting to get traction in the UK...”
http://www.techworld.com/startups/ranked-uks-new-breed-of-digital-only-challenger-banks-3635411/
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