Bank of England makes display of common sense – North America is London’s financial markets equal, not Europe
In a rare display of common sense, the Bank of England has stated that London’s position as the epicenter of financial services should be furthered by looking across the Atlantic, and not toward outmoded Europe with its low productivity and moribund economy
Common sense and business acumen from a government-owned public sector entity. Now there’s an oxymoron!
The Bank of England has today demonstrated some degree of level-headed common sense which is usually as uncommon within departments which are comprised of public sector hierarchy as a sunny day in Manchester by stating that London’s financial services firms would rather establish operations in North America than do so in mainland Europe following the UK’s exit from the European Union.
Exactly as FinanceFeeds has stated on many occasions and backed up with substantial research during the pre and post EU referendum period, the Bank of England’s Deputy Governor Jon Cunliffe has now concurred that there is absolutely no way that European centers such as Frankfurt, Paris or Amsterdam can even hold a candle to London.
Indeed, London is the center of global technological development for the institutional financial world, and as a result its electronic financial markets sector has a highly developed framework within which to operate, plus it is home to the most established and astute Tier 1 banks, institutional companies, non-bank ECNs and publicly listed retail trading giants with their own institutional liquidity divisions and proprietary technology.
Absolutely nowhere on mainland Europe does anything come close. London employs only 0.0009% of Europe’s workforce in its financial markets sector, yet that sector produces 16.1% of all tax receipts for the entirety of Europe. That’s what I call productivity.
The hipsters of Berlin who sit in coffee bars whilst stroking their moustaches whilst contributing nothing to the advancement of the technological and financial world are outclassed severalfold by the highly experienced and polished executives of London who understand how business works properly and are able to maintain top level relationships from Tier 1 bank to technology vendor to market positioning.
The Southern European cities with 30 hour working weeks, creaking infrastructure, massive debt and no modernity are home to empty streets for 3 hours every afternoon, during which time London has generated several trillion dollars in notional volume and negotiated a few more international deals at corporate level from within the plate glass modernity of their leading edge facilities, or from within an artisan-style restaurant which, whilst an institutional liquidity deal is being forged on one table, hosts 40 other guests in the same business.
London was a sponsor of the European Union’s continual bailouts to failed projects. It was never a benefactor. Astute business has been throwing billions down a socialist hole.
Not anymore.
Mr. Cunliffe stood up in the House of Lords and said “”What we call London, I can’t see that being replicated in the foreseeable future in one place in the European Union” in front of the EU financial affairs committee yesterday.
“The idea the ecosystem just transplants itself is highly unlikely” he said. Correct. Why would it? London will flourish tremendously without the EU millstone round its neck.
In addition to Mr. Cunliffe’s quite correct observation, a written report of the meeting was produced under the Chatham House rule which is a system for holding debates and discussion panels on controversial issues, named after the headquarters of the UK Royal Institute of International Affairs, based in Chatham House, London, where the rule originated in June 1927.
“Financial services are one area where London has global excellence – with the EU ultimately benefitting from London being in such a position. The danger lies in completely getting rid of London as a global centre of excellence – such a disaggregation would result in a fractured system” states the report.
This is like concluding after much deliberating that the sky is blue and the sea is wet.
Disposing of nuclear waste, or putting financial operations in Europe. Which is more dangerous?
One participant of the meeting added: “Moving financial services is as complex and risky as moving nuclear waste” whilst documented minutes of the meeting stated “The meeting noted that we have to take into consideration the outcome not only for the City of London but for Europe as a whole. It is important, and highly likely, that all financial institutions have well-advanced plans for location decisions going forward, and there is a need upfront for an organised, orderly transition. It is, however, unlikely that anywhere else can offer what London offers.”
It is quite apparent from the discussions that most Bank of England officials agree that having sister operations in New York is the answer as the markets open up for an independent Britain which can align itself with the great financial centers of the world, including New York, Chicago, Singapore, Hong Kong, Shanghai and Tokyo and not Europe which is about as advanced compared to London as the horse is compared to a Harrier jump jet.
