London Banks in advanced stages for moving to Europe.

Some major banks are in advanced stages of planning to shift some operations from London to Paris, France's leading financial regulator has told the BBC. Benoit de Juvigny said that "large international banks" have undertaken the due diligence needed to set up a subsidiary in the French capital.
He also told Newsnight that "many other companies" had lodged informal inquiries about moving post-Brexit. Link.

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Becoming clearer that many big businesses think it will be a hard "brexit" and preparing before that big day happens.

Mr de Juvigny's disclosure that major banks have gone as far as conducting due diligence shows an important milestone.
Due diligence is the process of close scrutiny that major businesses go through prior to a major deal. It is detailed and expensive, and even wealthy banks don't undertake it lightly.

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Hardcore Brexiters will continue to say they don't care and will continue their anti big business sentiment which was behind Brexit but I worry many jobs beyond finance and services will go overseas.

Infinite Chaos said:

Becoming clearer that many big businesses think it will be a hard "brexit" and preparing before that big day happens.



Hardcore Brexiters will continue to say they don't care and will continue their anti big business sentiment which was behind Brexit but I worry many jobs beyond finance and services will go overseas.

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That is interesting. I just talked with a senior banker in Luxembourg about that. His take is that it is much too early to take any measures. He said he was sceptical about the legal systems and judiciaries on the continent and that adaquate personelle cannot be found in any of the continental hubs. Nobody will risk that just to find themselves having moved down market without a very hard Brexit occurring.

joG said:

That is interesting. I just talked with a senior banker in Luxembourg about that. His take is that it is much too early to take any measures. He said he was sceptical about the legal systems and judiciaries on the continent and that adaquate personelle cannot be found in any of the continental hubs. Nobody will risk that just to find themselves having moved down market without a very hard Brexit occurring.

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I really don't understand any of the above.

Moving to Paris or the Netherlands, or even Brussels is no BigDeal, and surely an accommodation will be made for the passports of British workers. They'll love coming, anyway. Not all of them, but most. Those who will be laid-off can find jobs in the countryside that voted for Brexit. (Like milking cows? ;^)

I know a great many Brits who work in France, and they are strategic to their employers in international firms. The French are not all that good at foreign languages, and I am sure the government will come to an accommodation as to where they pay taxes. After all, the Yanks here are subject to American taxation, but only beyond a certain income. Some arrangement of that sort is possible.

(And of course, the Scots are most likely to skedaddle from the Brit Empire and remain in the EU.

What is really hurting are the Brits who liked to retire in France. Brexit has caused the pound to bottom-out. It is hurting some retirees who are packing up and returning to the UK.

That party is decidedly over ...

Infinite Chaos said:

Hardcore Brexiters will continue to say they don't care and will continue their anti big business sentiment which was behind Brexit but I worry many jobs beyond finance and services will go overseas.

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That will depend upon the pound and its value with the euro.

If the pound continues lower (than the euro), there is no advantage for car manufacturers, for instance, to move out of Britain. Ditto other manpower-related industries.

Services face the same-but- different problem. British services-employers are not going to find Europe any more attractive cost-wise, just like Finance. Finance can afford the move, but perhaps not other services-related companies ...

I wish my UK bank would **** off to Paris with my overdraft

Lafayette said:

That will depend upon the pound and its value with the euro.

If the pound continues lower (than the euro), there is no advantage for car manufacturers, for instance, to move out of Britain. Ditto other manpower-related industries.

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Depends fully on what deal they get with the EU.

At the moment there is no tariffs but if there is no deal on this area, then you have to add 10% tariff on top (at a minimum). Also remember, raw materials go up in price because of the low pound, and since the car industry is dependent on importing raw materials for the cars.. well, you get the picture. Not saying that it is impossible for the British car industry to remain where it is, but lets be brutally honest... lots of stuff is stacked against it. The EU has zero incentive to allow British made cars full and "free" access to the EU market. They would rather have that the car industry move the production to the EU.

Services face the same-but- different problem. British services-employers are not going to find Europe any more attractive cost-wise, just like Finance. Finance can afford the move, but perhaps not other services-related companies ...

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Depends on the industry. Banking can move easily and fast... a flick of the switch so to say. With the requirement of having a EU banking license to do business in the EU, then the chances of banks and financial institutions in London moving is quite high. It will depend on what bribes the UK government can stomach. My personal belief is, the reason that the May government has been so piss poor in planning for an EU exit, is to soften the blow for the banking sector and hope that they actually stay. But again it will depend on what ever deal the UK can get, and they are in a very weak negotiating position.

As for other services.. well we have already seen airlines moving their HQ to the EU, despite them being mostly UK orientated.. British Airways is for example technically a Spanish company now days. Other services industries will be more difficult, because of the nature of their service.

It will also depend on what walls and red tape that the UK government will attempt to prevent companies leaving or punishing those that do. Like it or not, the UK is in a piss poor negotiating position and they know it... another reason they are pushing the article 50 further and further into the future.

Also one argument could be that the May government is waiting for the elections in France and Germany, hoping for a "Brexit" type situation to hit those 2 countries, which would strengthen the UK position. It is a dangerous theory because it can back fire quite dramatically.

We shall see.

Lafayette said:

I really don't understand any of the above.

Moving to Paris or the Netherlands, or even Brussels is no BigDeal, and surely an accommodation will be made for the passports of British workers. They'll love coming, anyway. Not all of them, but most. Those who will be laid-off can find jobs in the countryside that voted for Brexit. (Like milking cows? ;^)

I know a great many Brits who work in France, and they are strategic to their employers in international firms. The French are not all that good at foreign languages, and I am sure the government will come to an accommodation as to where they pay taxes. After all, the Yanks here are subject to American taxation, but only beyond a certain income. Some arrangement of that sort is possible.

(And of course, the Scots are most likely to skedaddle from the Brit Empire and remain in the EU.

What is really hurting are the Brits who liked to retire in France. Brexit has caused the pound to bottom-out. It is hurting some retirees who are packing up and returning to the UK.

That party is decidedly over ...

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No big deal? Well, we were never able to get good people in the necessary numbers in Frankfurt or Paris. Luxembourg was a little different, because the business had a more narrow focus. That is why French and German banks moved so much of their business to London. That was very expensive. A friend of mine was responsible for the intracity move of Commerzbank a number of years ago. Both the costs and the risks involved were astounding. Moving from Paris, when we did it, we did slowly to avoid the disruptions of an all in one.

As to the legal systems I will relate my then colleagues take in French management and legal department. When we were discussing place of jurisdiction for business with Sparkassen and Landesbanken they wer quite firmly of the opinion that ceding to client demands for Frankfurt would require an increased risk priced into the product as we would surely lose in a German court standing against a German company. They were right to an extent for Germany and certainly for Paris knowledge of which had formed their opinions on the matter. They were much more comfortable with London thinking that the courts there were far more impartial. My experience has confirmed this.

joG said:

Both the costs and the risks involved were astounding..

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Why? The terminals show different numbers depending upon the city?

I'm joking of course. I've seen these huge rooms with a hundred terminals all showing market-numbers and thought "Boy, am I glad I don't work in that beehive!"

I don't even know why they come to the beehive - with a terminal and a telephone they can do the same job from their homes ...

joG said:

~ adaquate personelle cannot be found in any of the continental hubs

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People move around easily - I can imagine many of those employed in London Banks are not all UK citizens so they can either return to use whatever EU visas they got to move across, especially once tariffs have an impact.

joG said:

~ without a very hard Brexit occurring.

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Some of the Brexit conservatives were saying last night's vote by Parliament gave carte blanche for a hard Brexit.

PeteEU said:

Not saying that it is impossible for the British car industry to remain where it is, but lets be brutally honest... lots of stuff is stacked against it. The EU has zero incentive to allow British made cars full and "free" access to the EU market. They would rather have that the car industry move the production to the EU.

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I agree, higher production-costs are going to be astronomical if the pound does not recover. Besides, British car-production had already moved very largely to the continent (for the big-cars with big-margins) and to North Africa or Spain or Eastern Europe for the smaller cars. (The Mini is no longer "mini" in either size or price.)

The most-selling car-manufacturer in France is Dacia (owned by Renault) and all the cars are built in Romania.

Who ever thought that the Brits could be so collectively stoopid to have voted for Brexit? They will come to hate that word ...

Lafayette said:

Why? The terminals show different numbers depending upon the city?

I'm joking of course. I've seen these huge rooms with a hundred terminals all showing market-numbers and thought "Boy, am I glad I don't work in that beehive!"

I don't even know why they come to the beehive - with a terminal and a telephone they can do the same job from their homes ...

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No., one can't do it from home as well as from the hive. There is too much informal information to exchange. It is even difficult to sit in one of those glass boxes more than a short time a day, if one wants to keep on top of what is going on.

Infinite Chaos said:

People move around easily - I can imagine many of those employed in London Banks are not all UK citizens so they can either return to use whatever EU visas they got to move across, especially once tariffs have an impact.



Some of the Brexit conservatives were saying last night's vote by Parliament gave carte blanche for a hard Brexit.

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The problem is for the banks as well as for the people. Both need deep personnel markets. As for nationalities should there be a Brexit, I see no problem. I had Americans, Indians, Arabs and a Hong Kong Chinese on my team along with a few Europeans. There were never any problems with with permits nor had the non EU people any problems switching to other firms.

As to the hard Brexit, let's see how it goes. But that link was interesting.

One need see that in international corporations (here banks) you go where you're sent. We're not talking about the teller boys'n gals at the counter here.

Chinese friend of mine in London is already packing up to go to Amsterdam (where his "house" maintained a branch anyway), just like he'd go to Singapore if required.

The issue here is (or may become, we'll see) access to Europe which so far was given without the necessity of obtaining cross-continent trading (banking) licences. As to being unable to get proper staff anywhere in Europe, that's about the daftest statement I've read lately.

That German "Landesbanken" (owned by the individual federal state and catering primarily to the very same) and "Sparkassen" (still somewhat hick-town savings banks, however much and however loosely agglomorated thruout the nation) might quake at the thought of losing London is hardly relevant in the overall bigger picture, they're not of relevance here.

Entities like Goldmann, HSBC and the whole other bunch will be and resident permits for any staff they choose to "import" from wherever (UK included) will be as little a problem as they are today.

Where the car industry is concerned, one need see that production in the UK doesn't make the whole branch particularly British. Of course the UK is an important market (perhaps THE important market) for cars from Europe and elsewhere, but it cannot match Europe by a long shot. Leaving aside productions (virtually all foreign controlled) in Britain catering to its (domestic) demand, much has been located there on account of advantageous labour costs, general logistical perks etc. and much for the sake of selling thruout Europe (not just Britain).

If things go "punitive" (hopefully not), Ford, GM, Honda, Nissan, VW, Merc, BMW and others may still think it worthwhile to maintain production that serves the domestic market there, but where the same sites now also deliver to much of Europe, prohibitive tariffs may induce moving more production to Europe at the expense of downsizing British sites. The pound would need to fall a lot more to offset the possible deterrents and then any attractive level would have to be guaranteed. Not to mention that domestic market gains would fall to the lower buying power since (as has been mentioned) raw material prices would hardly be so kind as to adjust themselves just for the sake of one country.

But, as we constantly are forced to agree, before article 50 is not invoked, it's all a lot of crystal ball gazing.