Typically excellent piece from @dsquareddigest The exponential insight is especially neat. Think of it a little like fishing...today you can’t export oysters to the EU (because you simply aren’t allowed to), tomorrow you don’t have a fish exporting business (to the EU).
The extremely small minority of people who known anything about this who think that Brexit will be good for the City make a number of arguments which I shall address in turn...
1. They need us more than we need them. This is a variant of the German carmakers argument. And we know how that went...Business will follow the profit opportunity and if that has moved then so will the business...
And what do we mean by us / we. We’re not talking about massed ranks of Euro investing / trading etc blue blooded British institutions.
Au contraire. We’re talking about the London based subs of US, Asian and indeed European capital markets players...As soon as they think the profit opportunity has moved then so will they...it’s a market innit...
2. The Europeans will never act in a way that might be economically sub optimal.

I refer you to Brexit. But kidding aside, the balance between economic optimality and, to coin a phrase, taking back control is not at all straightforward.
I bet a bazillion notional shillings that many people might consider the benefits of taking back control over a vital national function far far far outweigh an additional economic cost.

I refer you to the financial crisis.
3. But but THE EU IS GOING TO FALL APART IT’S ONLY A MATTER OF TIME

Good luck with that.
4. But the U.K. is a speedy fast turning speedboat and the EU is a ponderous sea tanker of weighty regulations.

🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣
The U.K. regulators are extremely tough. Arguably tougher than the EU. I refer you to ring fencing. Or the U.K. conduct regime (very scary). The idea that any of this is going to be materially relaxed is for the birds.
5. Freed from the dead hand of Europe, we shall exploit all sorts of wonderful new opportunities.

Well. Maybe. London has a v substantial scale / incumbency advantage. But ofc (as Dan points out) that does not mean that those new opportunities will necessarily arise in London.
The bottom line is that London ain’t going anywhere any time soon as a leading financial services capital.

BUT. There is no way round the fact that Brexit has impaired London’s competitive position. This is an apple falling, water flowing downhill point.

It’s not a debate.
Over time, the damage will range from significant to really quite bad. The possibility of the latter depends on the EU getting its act together re CMU...if it does (debatable) then watch out...

/ends

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More from @Sime0nStylites

14 Feb
It has come to my attention that this take may not seem intuitively obvious to everyone. Well gather round and let me explain my uncannily prescient logic honed through years of staring into the mists that surround the column.
Naysayers, many and occasionally distinguished, point at the government’s antipathy towards Europe, exemplified by its performative expressions of sovereignty, supported by the Labrador-like loyalty of the right wing press, combined with Labour’s apparent lack of interest.
And all of this is true and well observed. It is also true that Europe bashing has provided a rich seam of political capital (indeed it has made the careers of the PM et al) which, like a dog tantalized by the juicy marrow bone of divisive rhetoric, may prove difficult to resist.
Read 16 tweets
11 Feb
Everyone seems to be going a bit nutty about the Amsterdam share trading news. Is it news? Most definitely. But is it unexpected. Most definitely not.
Let’s start with what if means. Put really simply, in the absence of passporting (now an impossible dream) and most likely equivalence (looks increasingly dicey) the majority of EU related wholesale banking activity in the City will migrate to the EU.
Some of this will happen quickly. Some will happen slowly. The Amsterdam news is a good example. The physical activity has shifted but this probably doesn’t mean much in terms of jobs. Indeed, much of the shifting so far has been trading activity (and ‘money’) vs jobs.
Read 8 tweets
9 Feb
Curious that people didn’t seem to realise that a thin deal or no deal meant that the EU would have huge leverage over U.K. fisherfolk / carmakers / bankers et al doing business with the EU (the other side of the coin from the German carmakers argument).
The only remedies to this situation are...
1. Let the affected business wither away to be hopefully replaced by business with other parts of the world.
Read 8 tweets
7 Feb
And now for something completely different.

Seagulls I Image
Seagulls II Image
(Felt like trying to do something joyous)
Read 4 tweets
7 Feb
1. The pandemic will end but there will be no reversion to political ‘normalcy’. The after effects of the pandemic, combined with Brexit, will shape U.K. politics in the 2020s and 2030s.

Thread
2. Everyone wants the world to go back to normal. This is a profound and powerful desire. I think you see it in headlines about summer holidays and pubs reopening. I also think you see it in the stability of the government’s poling.
3. Just, please, make everything better. Just make it all go away. Can’t we just go back to how we were? Before all of this. Go back to the happier maskless past. These are entirely understandable sentiments.
Read 21 tweets
6 Feb
My guess is that if someone invented a time machine to go back to an alternate 2015 where everything would be the same apart from no Brexit and no Covid - a world where people just got on with their lives - pretty much everyone would want to go.
I wonder how this translates into politics. I think people just want call and stability. No more fighting. No more anxiety. No always having to worry about the next huge event.
Whoever makes the last four or five years go away wins. And Brexit is a large part of that. Does government really want to be fighting away at the best election re the NIP or shellfish or the hundreds of other issues that will emerge. I sincerely doubt it.
Read 4 tweets

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