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Comment by ksenzee | Hacker News Reader

Headline should read "Bank Execs in Davos Privately Say London Clearing Probably Safe". Right now the last bit is chopped off.

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TL;DR: It's too dangerous to move the whole banking system that's set up in London, so it's probably going to stay as it is for now.

This is a bit more limited than that, one really specific part of the banking system. Right now, Euro-denominated transactions can be cleared in many locations, of which London is one, with a large share of the total volume. Some Eurozone countries would like to require that this take place only in Eurozone countries, and unsuccessfully pushed for that previously. Some of them think the UK leaving the EU presents a good opportunity for a renewed push in that direction (since it weakens the UK's role in internal EU politics). The people quoted in this article think that's unlikely to happen.

This is all pretty deep in the weeds for a nonspecialist audience though, I think.

> This is all pretty deep in the weeds for a nonspecialist audience though, I think.

It's the tip of the iceberg perhaps. Deep in the weeds for sure but rather influential. Clearing is important but really what this is saying is "business as usual".

The UK would be wise to play chicken as not cooperating with the UK is bad for everyone (The EU knows this but they have to posture). The UK will smartly make some concessions that especially punish the districts that made this happen (No one will really talk about this). British Sterling will suffer for awhile as being less global should make your currency less valuable and it will - expect parity with the USD in the short term. Those who don't travel won't care and those that can won't notice.

Everyone wins then. The will of the people is had, the people that are affected contain the blast radius and life goes on, business as usual. Which is good. And we all live on.

> The UK will smartly make some concessions that especially punish the districts that made this happen (No one will really talk about this).

The districts that voted for it?

Governments can't "punish" Parliamentary Constituencies so presumably he means most of England outside of London along with the whole of the country of Wales.

Which just goes to show how ludicrous the assertion is - all the Parliamentary talk right now is about desperately trying to connect/reconnect to the voters in these areas (who remember are the MAJORITY of the voters in those areas).

The only people who will be punished will be those who try to punish others. The former Chancellor of the Excheqeur (Finance Minister) talked about a "punishment" budget if the people voted to leave the EU. Please note I said "former" - he was sacked.

They don't need to explicitly punish areas like Wales, just treat them like they have been treating them - business as usual without EU Regional Development funding will be devastating. Nobody's talking any more about having vast sums of money available to reallocate, so unless we're cutting somewhere else I don't see how that vast EU pool is being replaced.

Same is likely to happen in Cornwall. The local MPs are pushing for the UK government to replace the EU structural adjustment funds with equivalent amounts of UK funding, but it's now looking very unlikely that this will happen.

That was everywhere in England and Wales apart from London? Interesting low sterling rewards these places... it makes it cheaper to onshore work to them, and it lowers the actual cost of providing things to them (social security and health)

That was everywhere in England and Wales apart from London?

It depends on the scale you look at. Looking at the regional count results, only three of the 12 regions (Greater London, Northern Ireland, and Scotland) voted to remain, and the electorate in these regions makes up 23% of the total. But looking at the voting areas, 119 of the 382 (i.e. 32%) areas voted to Remain, and 37% of the electorate live in a voting area that had a majority for remain [0].

These voting areas are mostly in Scotland or NI, but there are isolated pockets around major Northern cities (Liverpool, Manchester, Newcastle, and Leeds), and the cluster centered on London reaches across much of the South (North East to Cambridge, West to Cardiff, and South to Brighton). See this map [1], a map in which the voting areas are scaled in proportion to their population [2].

[0]: I calculated this using the results from the Electoral Commission at http://www.electoralcommission.org.uk/find-information-by-su...

[1]: https://commons.wikimedia.org/wiki/File:United_Kingdom_EU_re...

[2]: https://www.theguardian.com/politics/ng-interactive/2016/jun...

The problem with the bankers analysis is that the EU has already tried to force clearing out of the UK, by passing regulations that openly violated the EU treaties themselves. The UK had to go to the highest courts to get the rules rolled back. It was a long and expensive legal process. The only reason the EU hasn't already tried to gut this business from the City of London is because their courts ruled they couldn't do that to an EU member, not through a lack of will. They certainly either don't think it'd be dangerous or (more likely) don't care.

The people who run the EU are far more concerned with prestige than the details of these mechanisms. They don't like the UK, never have, and it bugs them that London - which doesn't use the euro - is so important to the parts of Europe that do. It's an itch they can't scratch.

"Despite French and German threats to claw away clearing in euro-denominated derivatives, Britain will probably continue to house trillions of euros of swaps trades because limiting where the operations can take place could backfire, said the executives from several global firms"

"Bankers have not been unanimous in their views, however. Executives at four of the biggest global investment banks in London in September said they expect France and Germany will prevail in the clearing tussle."

Some bank execs think that it will stay, other bank execs think that it will leave.

The title should have been "Clearing in dispute as Brexit moves on". But that probably is not what the flavor of the news source wanted people to reflect on.

> The title should have been "Clearing in dispute as Brexit moves on". But that probably is not what the flavor of the news source wanted people to reflect on.

Why would anyone who is actually really affected by these esoteric things make it harder on themselves?

> anyone who is actually really affected by these esoteric things

They may seem esoteric, but they affect everyone. The amount of CO2 in the atmosphere and the acidity of the oceans also are esoteric.

Only clearing. HSBC and Goldman Sachs are already reducing jobs in London.

That's not much of an improvement in terms of comprehensibility.

> Right now the last bit is chopped off

Pardon me--fixed.

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