A lot of these articles have been coming out http://www.independent.co.uk/news/business/news/b…
where banks in London are considering moving a large amount of jobs into the EU away from London.
Is it gonna be as bad as they say?
Could all these jobs go or is it an overreaction?
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I think part of it is scaremongering from the banks who want the least disruption to their operation, but I also think there a bit of legitimate concern since the UK haven't announced what the Visa situation will be going forward. Personally, I think as long as the UK comes up with decent and fair Visa rules that allow banks to continue hiring the best talent regardless of whether they are from, we will see negligible job loss and no meaningful change. Realistically, the only EU city that could potentially turn into a financial center is Paris and it's never, EVER going to happen given current environment there (socialism, government intervention, ridiculous labor laws, etc). Frankfurt is way too small (they are more people working in the City than people living in Frankfurt), same with Switzerland.
If the UK gov fucks up on the Visa rules, all bets are off, but I would think the biggest impact would be jobs moving from London to NYC / Asia, not to continental Europe.
Yeah I think the same, that Europe does not provide a suitable environment. I think that uk is going for a very , very hard brexit and as you say, I agree, that nyc will be the winner.
Funny thing is UBS and Goldman Sachs are building a new office in London.
UBS have already moved in and GS is nearing completion
It's not just Visa rules. There's passporting to be taken care of. Not to mention, no single city would absorb all the jobs. BO will go to Ireland and Poland. French banks would go back to France, DB, GS, etc would likely choose Frankfurt, Amsterdam will take some banks (since less transition problems due to language), Switzerland will take UBS, CS, etc. EBs might choose to expand regional offices/high-end Swiss cities over London. London might still rule as the financial haven for filthy rich Russians and Arabs though.
Agree mostly, but UBS has their IB headquarters in Frankfurt already, so likely would move there; CS might act similarly. Switzerland doesn't have passporting rights to the EU, so Frankfurt is a likelier choice for EU focused IB functions of Swiss players.
You say "never" for Paris, but HSBC is already moving staff there:
http://mobile.reuters.com/video/2017/01/18/hsbc-plans-paris-move-after-…
I don't doubt that there's a long way to go before Paris becomes the next London, but never say never!
Paris just lol.
Is Paris that bad of an option? What do you think of frankfurt? Is there nowhere they can go in the eu?
Not pornflakes, but: yes, meh, not really.
doing a 'London amount' of work in Paris would be a nightmare for a lot of banks, why deal with all the red tape for marginal better access to an anemic EU? and no senior banker would want to work in Frankfurt, since it's such a boring city (nice, clean, etc but nothing to do)
in all honesty, if I were supreme overlord of all the banks and HAD to move 'London' into the EU, I'd probably pick Milan. Already a financial center, it's a good city, and Italy isn't as mean to business as France is
Great question, but at the moment our are only conjectures. We have to wait the MPs decision about the article 50, and banks now make pressure with those threats. If London will not be part of the single market, and Eu keeps a solid project, or rather in France will win Macron (ex Rotschild) and hour labour increase tax falls etc., Paris surely will be the new London for Europe, followed by Dublin (Ireland tax heaven) and Amsterdam (amazing fiscal policies). If not, and Le Pen will win in Fr, Brexit become the new world financial hub, and Banks will not switch their headquarters. IB relocate (with big big costs) only if Eu show a solid project!
I just hope the populists win, so that the smug EU bureaucratic elite get fisted up their arses. Then once they realize they can't do without the taxes from financial industries, these populists will get fisted up their arses, and will have to relent to the demands of the financial services sector.
Uncertainty is a bitch yeah, but the entire financial sector is driven by uncertainty. All this talk about jobs moving, etc. is just another factor for banks to gamble upon.
How are they smug?
MPs vote is a non-issue. There are 2 potential votes:
1 - MPs vote on whether to invoke A50. Guaranteed yes vote as half of them would lose their seats in 2020 if they were seen to be 'defying the will of the people'. Most non-urban constituencies voted Brexit.
2 - MPs vote on whether to accept the terms of a deal agreed, after the 2 year negotiation period. This is a pointless vote as if they vote no, then we leave with nothing but a basic WTO framework so another guaranteed yes vote.
It would appear to be a genuine possibility of moving back office functions to Ireland, some PWM functions to respective cities, but FO style jobs simply don't really have anywhere else to go. Amsterdam is a possibility, Frankfurt is too small and would take 10-15 years to get up to scratch (similar to the development of Canary Wharf), Paris is simply not finance-friendly.
It's not really that feasible to move all the jobs to NYC/Asia either. Western Europe is pretty well located, both in terms of travel and time zones.
I've always wondered how hard it would be to get the appropriate clearances to have full operations in both EU and UK, albeit with a skeleton crew in Europe. I know almost nothing about the regulations surrounding passporting but what is to stop a bank simply having joint offices in say London, Stockholm, Amsterdam and Milan and simply negating the issue? My understanding is that the financial passporting simply allows you to do business anywhere in the single market, even if you don't have an office there. Could be wrong!
Fully agree with you Asatar, but let's consider the two different scenario about the Eu: 1. Macron will win in Fr, La Defense will be the new Canary Wharf, the Eu project got strengthened. 2. Le Pen will win in Fr, Merkel will lose in De. Eu going to destroy itself from within. Brexit will mean great opportunity. Remember the big cost of the relocation
What would happen to NYC if banks operating there were no longer allowed to sell their services to the rest of the US states freely? Chicago, LA, SF, DC and Houston would be seeing an influx of people from those NYC banks. Or so I would assume.
Not all jobs would move to the same place. BO will go to Ireland, Poland and similar places. Trading and Advisory would be allocated within the EU (each bank might relocate into its own market. e.g. UBS and CS go to Switzerland). If the UK will implement a fair Visa policy I think only BO jobs would go and this would have happened regardless of brexit.
Dude, you echoed exactly what I said -_-
ahahah just saw that.
But surely the compliance costs would skyrocket if different parts of a bank where in a different country try?
Offshoring to BO to low cost location would lower the costs and it is what banks have been doing for the last years
What would a Fillion win mean?
He lives in a 12th century castle and has repeatedly and unapologetically said he's a fan of Thatcher and his policies will be all about the entrepreneurs (his words: "I will do everything for the entrepreneurs"). So guess Paris could become the avant-garde centre of finance it once was?
So lets say macron or fillon win, I understand that means la defence would become the new "Canary wharf". I am pretty concerned, does this mean the offices in paris will become the new eu hq for US banks and would the London offices just become smaller satellite offices?
With the five star movement poised to win in the next election, surely that means the breakup of the euro?
They won't leave Europe regardless.
I know they will maintain a presence in Europe but I'm wondering if they may register their European hq out of the UK.
Biggest winner is NYC. Potential for synergies with existing operations and a relatively more stable regulatory and political environment.
It will be much easier for banks to expand or shift jobs to NYC as they already have the infrastructure in place and a large talent pool. If it isn't geographically sensitive, it can easily be shifted. I am sure all cities in Europe will benefit, but the biggest benefactor will be NYC as it will be the most cost effective in most cases.
No. Its a negotiating tactic, and a pretty weak bluff. We've seen this kind of joke before; remember £4000 a year from every family? The regulatory environment in the other big European players (BaFin especially) is famously hostile to business. The political risk in the UK is probably lower than in say France, where the anti-EU voices are also explicitly anti-finance, something we didn't really hear in the UK. Banks will open branches in the EU with some staff (probably new hires) to try and keep passporting.
Its a problem for asset managers who sell to European clients more than anyone, but again I wouldn't expect any mass exodus to other centres. In some ways the "Plan B" brexit scenario where we aggressively cut taxes and regulation (...no MIFID2??) would work out nicely. Still, French and German banks probably not the place to be at the minute. For UK / ex-EU firms based in London no, you won't see any significant changes.
Can anyone tell me if there's truth in the rumours that London IBs are halting hiring for the forseeable future? For someone who's looking to get an IB intern next year and hopefully do an MSc in Finance, I find this all quite worrying. I hope to purse a career in London in IB, preferably DCM, but according to a friend who interned at HSBC last summer, the IBs will NOT be hiring any time soon and if anything will continue to move IB roles out of London. Anyone in a position of power/expertise to comment on this?
Would really appreciate some honesty, and someone telling me if its true that I will have no chance of landing a grad job in say 2 years time because they've all been moved to Frankfurt, Dublin, Paris, Milan etc :(
Your friend is talking bollocks. If banks stop hiring juniors, who is going to churn out pitch books and models? Banks will always need Analysts and Associates, they may cut back on how many are hired, but they will certainly still be hiring.
good to hear! He is a good source which makes it quite damning - I presume it will just be harder than ever to break in after Brexit ffs
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