The City of London averted one disaster with the draft Brexit deal announced Wednesday. But the resignation of Brexit Minister Dominic Raab showed the obstacle course is far from over.
Even if the U.K. Parliament clears the agreement — and that’s still far from a sure thing — negotiations on a new financial rulebook will continue well into 2020. The bottom line is that banks, brokers and asset managers continue to face talks going off the rails.
Charles Brasted, a partner in the Hogan Lovells law firm, said in a statement, or Our message to our affairs continues to be: to the worst, to the hopes olan and to the best defense ros.
Reaction emphasized risks. Raab’s endorsement la he desperately supported the cabinet Wednesday, underlining that it does not support it with edi good conscience, “- Prime Minister Theresa highlighted the danger facing May and the process itself. The EU, meanwhile, called for the 25 November summit to sign the agreement.
Justin Urquhart Stewart, co-founder of the London-based investment company Seven Investment Management LLP, said: ı Because no one in the city still knows such a way, we’ll be caught in holding. Londra £ billion in assets ($ 18 billion). Acak We’ll all be sitting here, uy What’s next? Iz We say, and none of us dare to take a position. So we don’t do anything, we’ll stay in the liquid, and hopefully some kind of reason comes out of this process. ”
The Pound, which showed little change on Wednesday, fell on Thursday, falling below 1 percent and fell below $ 1.29.
Nearly 600 pages of documents published in late Wednesday had three short paragraphs on financial services. According to the prescribed regime, U.K. The EU will depend on its goodwill; Brussels authorities will have a unilateral power to close the door in a short period of time if they find it is not a flat regulatory playground.
The new installation – known as ir equivalence sektör – creates friction (and expense), prevents complete distortion and gives the financial sector what it expects; How does the EU negotiate with countries like the US?
Er The negotiators have taken big steps in the withdrawal agreement and in their future relations, inde said Miles Celic, president of the industry association TheCityUK.
The European Central Bank and the national financial regulators have made it clear that companies are expecting to create full service operations with their board of directors, risk management teams and compliance capabilities within the EU. This means that institutions that use London as a gateway to Europe for a long time will have to continue to rearrange people, capital and back office operations.
These conditions and the loss of London’s uninterrupted access to the remaining 27 EU countries jeopardize Square Mile’s # 1 financial center status in the world – not to mention her contribution to Britain’s budget. The US financial services sector paid 11 percent of total government tax revenues for the year ended March 2017.
While financial institutions are defending the worst, divorce without a deal – in 2016, the emergency plans they have been running since the Brexit referendum are suddenly easy to change and will not be desired.
It’s not like a week, but you don’t seem to know about another jump. Chicago-based derivative markets CME Group Inc. is bringing a $ 240 billion daily short-term financial market to Amsterdam. The Australian Commonwealth Bank is also building a base in Amsterdam. In the heart of Paris, the construction of a new commercial floor of Bank of America Corp. continues in a renovated post office.
Nis In some cases, it will be too late for the bank to change plans, durum says Jan Putnis, manager of the Slaughter and May financial company’s financial-regulatory team in London. ”Some banks are a matter of a week of moving large quantities of work to the EU.“
London was able to lose 10,000 banking jobs and another 20,000 homes in London, while Brussels-based think-tank Bruegel projects mobilized $ 1.8 trillion ($ 2.1 trillion) of non-UK assets at Brexit.
Still, it’s better than no deal. Over the months, the Bank of England and industry leaders have been alarming about the deterioration in derivatives markets. London’s LCH Ltd. The swap houses managed by the bank are processing trillions of dollars every day in contracts. Without a transition to continue uninterrupted trade with EU-based counterparts, banks faced a costly and devastating prospect of cleaning houses in Paris or Frankfurt.
Lawyers in the city will discuss details of May’s plans for the next two years. Like a process where Brexit comes to this point, this is just the beginning of the main event.
After March 29, the US government and the EU leadership will have to break a trade agreement and other measures that define almost every aspect of their economic relationship. As part of this process, this agreement will need to be transformed from a non-binding pause into a permanent rule book for financial ties between the United States and the EU.
“The more difficult question in this context is what bağlam equivalence es would mean, ğ said Clifford Chance’s partner, Simon Gleeson.
And the clock is passing. London and Brussels will have to face or face another cliff until 31 December 2020.
While this new reality puts all the non-European banks on an equal footing, Brexit can impact most British banks due to their potential impact on the home market. The International Monetary Fund estimates that the GDP in the US will increase by only 1.5 percent in 2019, the weakest performance of the largest European economies after Italy.
In a August interview, Jes Staley, CEO of Barclays Plc, said the lender would suffer a credit shortage because of the possibility of a slowdown in economic activity. But he also said that this struggle was also an opportunity for trade profits.
“I think Brexit will bring back volatility,” Stall said. Iyi And the volatility is good for us “
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