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Comment by JumpCrisscross | Hacker News Reader

> They are only hesitating between Amsterdam and Frankfurt

At least in private equity and the related leveraged loan, structured product and similar work, New York is taking the lion's share of formerly British bankers' business.

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In relation to Brexit? I don't think so. It will be much harder for most employees to move to NYC (visa) than Paris/Dublin/Amsterdam/Frankfurt. Also, apart from the Americans that are working here, convincing people to move 500 miles is much easier than to the US.

Banks operating in both countries can of course gradually shift more work towards the NYC office, but I don't think that many companies are looking to relocate whole departments there.

> relocate whole departments there

That's not what's happening. The top performers are moved, middle- and low-level staff in London released and new staff hired in New York. A handful of middle managers may be moved or hired in Paris or Frankfurt or Amsterdam, as a conduit, too.

Clients are also shifting. The amount of first-time business I am personally seeing from new European clients, who need a considerable amount of help adapting to New York's more direct banking culture, has us hiring frenetically (though locally).

Exactly, but even for well performing front-office staff it will not be easy to get a visa for everyone. Moving within Europe is easy as there's no visa process (right to work in the EU is already given).

I don't doubt that NYC will profit from Brexit, but I think it's more in an indirect way (as you describe) and the generally better economic environment in the US at the moment, not through relocation.

As a side note, some banks use the Brexit discussion to move back office functions to Eastern Europe, hoping that they can sell it as a Brexit consequence and not as offshoring.

> Moving within Europe is easy as there's no visa process (right to work in the EU is already given).

well, that would be conditional on Brexit, right?

For British workers yes, but a large portion of London bankers are EU citizens.

Visas aren't a worry for the big banks.

Really? I always had the impression that getting a visa to work in the US can always lead to delays, even if you're a company with a good HR department. Wouldn't you have to first try to fill every job with someone in the US, or at least pretend to to so?

Certainly not a problem for the big banks. They do this literally all the time. They have the staff, the connections and resources to fast track any of that stuff when and where they need it.

https://www.bloomberg.com/news/articles/2016-10-16/the-big-w...

The article is based only on a statement by the CEO of Morgan Stanley, who has an interest in concentrating more functions in NYC. I think most companies haven't even decided on a city yet. They'll have some cities short listed but will only decide once the terms become more clear. Until then it's pure speculation.

And while it's a natural move by an American bank to move jobs to the US, it's much less clear for the rest of the sector.

Yet thats what I hear too. (I live in NY)

Unless you have data to prove that statement, NY isn't taking any lev fin nor PE business from Brexit.

Most London-based PE houses have offices in other European capitals (Paris, Milan, Munich, Madrid, Stockholm, etc). Just take a look at KKR, Cinven, PAI Partners, CVC, Apax, Carlyle, etc, offices location around Europe.

Additionaly, most active banks have lev fin / acquisition finance teams in other European cities other than London (e.g. SocGen in Paris, BNP Paribas in Paris, DB in Frankfurt, Unicredit in Milan, Santander in Madrid, BBVA in Madrid, etc).

Should London be worried? Yes. Is the threat coming from the US? No.

>> "New York is taking the lion's share of formerly British bankers' business"

I thought the entire point of moving was to benefit from EU passporting - so moving from London to NY, even post-Brexit, would not help with that.

Ah, probably. The conversation I had was regarding where they'd go in Europe

That was my idea too. So us Europeans really did a number on ourselves with this one. Constantly agitating against the British financial services dominated economy and their catering to it. Now that they exit the club the continental idea is of course to split the booty. Talking about cooperation.

Frankfurt and Amsterdam are nice cities, but why wouldn't talent prefer first-tier ones? Why not go to NYC, Singapore or HK?

  Why not go to NYC, Singapore or HK?

Because they need an EU base to clear Euros and to maintain passporting rights to any other EU country, once the base is established in an EU country.

For this very reason Zurich (which is arguably the center of private banking) is out of the race. Switzerland is not an EU country.

Because the only reason anyone is talking about moving staff to inside the EU at all is because the EU can't attract them itself, so has to force those people to move through law.

It's a failing strategy, long term. Can the EU "attract" employers by making it illegal for them to sell without physically being there? Sure, but that's kind of the opposite of trade.

Passporting regulations are an innovation which made it easier for EU countries to do business with other [EU/EEA] countries, not harder.

Ultimately, if a branch of a company isn't in a jurisdiction which follows EU/US/Japanese law it can't expect to represent itself as a EU/US/Japanese branch and expect to do the same paperwork as an EU/US/Japanese branch. The innovation with passporting was entirely around assuming that your French or Estonian branch didn't need to do special Italian paperwork or set up an Italian subsidiary because they all sat under the same jurisdiction following the same regulations anyway. If you insist companies based on your territory should be free to not comply with EU regulations, you can't expect that same rule to continue applying

That is totally wrong. In fact the MiFiD II EU financial regulations that are coming into force in 2018 say that any country can essentially be passported into the block as long as they have an "equivalent" regulatory regime.

http://www.cnbc.com/2016/07/07/theres-a-little-known-eu-rule...

So your statement that such companies "can't expect" is wrong - in fact they can expect that, because the EU already committed to it.

This is posing a big problem for the EU right now because obviously on the day of exit the UK would still have an "equivalent" regime, so there'd be no grounds to force bankers to relocate. The details of MiFiD II were handled by technocrats whose brief was just to make trade easier, so such rules make sense: if the two regimes are close enough, why insist on EU membership?

Nobody realistically expects the EU to stick to their own rules though. The EU never lets written law trump political demands. Just look at the Euro bailouts if you doubt that.

The word "equivalent" is doing a lot of work when a country has left a bloc with the specific stated reason that it wishes to be able to implement legislative change without respecting EU guidelines or authorities. MiFiD II doesn't apply to retail customers and "third country" passporting isn't automatic and can be withdrawn at short notice, so even if Liam Fox stops believing that free trade is the result of government inaction for long enough to ensure appropriate reciprocal arrangements are actually made, some business units are still going to see relocation as a more attractive alternative.

Retail banking isn't what is being talked about in these articles, euro clearing is (primarily).

Can you name many countries giving the equivalent of passporting rights to foreigners ? Outside of Europe, I see no one.

It's the opposite actually. The specific activity that tends to be talked about here is Euro clearing. London clears transactions in currencies from all over the world, including US Dollar and Renminbi transactions. Nobody cares about this because it's just not a big deal. Except the EU, which has some weird hangup about having euro clearing be physically done in the eurozone.

Note that the EU has already tried to force this business out of the UK even before Brexit. The UK Government took the Commission to court and pointed out that their new regulations blatantly violated the EU's own commitments around discrimination, and won.

http://www.wsj.com/articles/u-k-wins-court-case-with-ecb-on-...

The EU is no friend of the UK, or bankers. They see finance workers as resources to be fought over and pumped for tax revenue, nothing more.

If your financial records and contracts are subject to a legal domain it's reasonable to require that they are present in that legal domain so that the law and legal requirements such as auditing and regulatory scrutiny can be enforced. This isn't some special new rule made up by the EU, the US and plenty of other countries have similar rules.

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