This article was written by Tyler Durden and originally published at Zero Hedge.
Editor’s Comment: In the long run, Brexit represents a healthy draw down of European superstate power. But in the short run, almost anything can be a flashpoint for panic, as everyone hates change. Markets immediately become risky, the regulatory approach to withdraw while maintaining trade between Britain and Europe is confusing at best, and worrisome in nature.
The banks and the powers that be want a bit of panic, and there’s almost the chance of something bigger unwinding into a bigger mess. It remains to be seen what the larger picture will be, but the system is likely to retract and hold onto as much as what it can of what was already in place.
Banks To London Employees: “Don’t Panic”
by Tyler Durden
With Brexit officially a go, banks in Britain are scrambling to undo months of verbal damage, and reassure their London employees over possible Brexit disruptions, a potential shift in jobs to continental Europe, and also talking down warnings made in recent months about leaving the City, some in now dashed hopes of getting a Brexit revote.
It now appears that many of those “threats” were hollow and as Reuters reports, investments banks such as Goldman and Nomura were among those who sent messages to employees in London as they work out how to keep serving clients across the European Union without spooking staffers, prompting employee defections to more hospitable employers. Richard Gnodde, CEO of the European arm of Goldman Sachs, stressed that no big changes were imminent even though he said last week that the Wall Street bank would begin by moving hundreds of staff as part of its “contingency plans” for Brexit. It seems a lot can change in one week.
“All of this work leads us to conclude that although Brexit may well bring some changes to our footprint, a lot will continue to operate as it does today,” he said in a voicemail sent to all London employees’ phones last Friday.
Morgan Stanley also informed employees in Europe that no decisions had yet been made on changes for when Britain departs. Rob Rooney, CEO of Morgan Stanley International, was blunter in updating staffers on the work of a committee comprising senior leaders at the bank which has been making Brexit contingency plans for over a year. “As prudence would dictate, we have been preparing for a worst case scenario, in which we would need to establish a more significant entity within the EU 27,” Rooney said in a memo to staff on Wednesday seen by Reuters. “We continue to monitor the situation closely and, when appropriate, will take the necessary decisions and begin to execute on our plans.”
Cited by Reuters, Gnodde said Goldman Sachs could make long-term decisions only after May’s two years of negotiations to exit negotiations to exit the EU were complete. “We also understand that you will have many questions regarding the implications of Brexit,” he said. “We are sensitive to those concerns, and want you to know that we will share any information on changes that will impact our European footprint as quickly as we can.”
Fearing they could lose top-performing staff, banks are treading carefully as they contemplate moving London-based workers to continental centers such as Frankfurt, Paris and Luxembourg, or paying them off and hiring employees locally.
In a similar message by Japan’s Nomura, the bank said in a message to staff on Wednesday that although it had been actively planning for Brexit, no final decision had been made on either location or timing of any new European entity, according to a source familiar with the matter.
Banks are enacting two-stage contingency plans for Brexit. The first involves relatively small numbers of jobs to make sure the requisite licenses, technology and infrastructure are in place, while the next requires longer-term thinking on what their European business will look like in the future. This is when bigger moves might take place.
According to Reuters, the British Bankers’ Association and the City of London Corporation, which runs the financial district, said in statements it is crucial that after the conclusion of the talks banks retain as much access to the single market as possible.
They both also said that Britain should announce a staggered departure from the EU that would allow British-based banks to prevent market disruption
Regulatory and banking experts working for the City of London and lobby group TheCityUK are drawing up proposals for a ‘mutual recognition’ system.
Under this, the EU and Britain would broadly accept firms in each other’s financial markets because their home regulatory systems apply similar standards. The aim is for London-based banks to keep serving continental clients, although skeptics say mutual recognition is largely untested globally and would struggle to win approval within the EU.
That said, perhaps in this particular case London banks are more worried than they should be: after all, with banks in Europe hurting and few actively hiring (Deutsche Bank’s “no bonus” policy will hardly prompt massive demand for lateral moves), with the buyside aggressively cost-cutting, and hedge funds shuttering left and right despite all time highs in global stocks, just where are the “panicked” bankers going to go?
This article was written by Tyler Durden and originally published at Zero Hedge.
The only time Jesus was actually MAD, is when he witnessed the filthy bankers (money changers) plying their trade inside the holy temple. I want to see these banksters hanging from lamp posts, like Mussolini.!!!!
J:
I have a better idea. It is one that Jesus Christ himself would most likely condone. Because these Banksters love gold so much, round them up and under armed supervision, let them work the gold mines; not with modern equipment, but with a pick and chisel and get themselves knee deep in water paning for gold the old fashioned way. Make them earn their daily bread. That will keep them out of mischief. And it is humane. You don’t have to be an animal or act like one. Just removing these men as controllers of our finances is sufficient. Hanging them may make you feel revenged, but keeping them alive and in prison would elevate our spirit. Praise The Almighty, Creator of Heaven and earth.
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Panning for gold in a gold mine? That’s an oxymoron, from a moron.
Anonymous:
I should have made two sentences or put in a semicolon. That happens when I am tired.
Calling people names says more about you than about the target of your insults. It is no wonder you don’t identify yourself, anonymous.
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Oh geez, are we going to get day by day stories of the latest in Brexit? If so, I will be busy looking elsewhere to discover what sleight of hand is up to throughout the world.
THE SKY IS FALLING!! THE SKY IS FALLING!!
it’s HAS….the sky HAS fallen. there, i fixed it for yuh.
If you knew that something was coming that was going to hurt you. Wouldn’t you do something?????? So what is the big deal!!!!!
What will be, will be.
I’m ready I’m not a bit afraid!!! Just watch you 6!
Sgt.
The European Union was supposed to be an economic steamroller that would dominate the world economy. This hasn’t panned out If the United Kingdom successfully leaves and does well, other countries will follow. The European Union will do all it can to sink Great Britain.
A lot of people writing collapse articles are just hell bent for the market to crash and social chaos to ensue. They have stated every new current event as the catalyst that will panic the markets and cause them to crash. Whenever something new comes along they start contriving a reason why collapse is imminent and “we must brace for the worst”. It’s has become predictable, a current events news item is published and fresh collapse articles are crafted within 24 hours.
Over the past, at least 10 years, thousands and thousands of events have occurred both nationally and globally with accompanying articles published about them, only to be followed with hyperbolic articles stating why all economic and financial hell has broken loose and will drag down the Western world with it. If anyone calling themselves a prophet had this kind of record they would have been totally discredited, a laughingstock, yet a lot people still eat this shit up and their appetite for it never seems to diminish. In fact, they crave it all the more because it is a fix for their escape from the world as it is. Each injection must be followed quickly by another one because the previous one never satisfies the need. One can only assume they want to believe the worst, and when it doesn’t happen they start searching for fresh reasons why we need to panic, the next fix that is. If only the world could crash and burn now they could finally get that crave satisfied. I only wish a lot of people stating they are Christians had the same zeal.
When some people are not content with their lives, or haven’t developed much purpose they start longing for another life, another reality. This is not rational; rather, they should make the best of their real life, apply effort and improve their own circumstances, people do it every day. Stop desiring a situation or condition where things are so bad that finally you are on par with everyone else. One day all hell could break loose, and yes prepping is a good thing, but stop wishing for it to happen.
yup…..and SOME people see things going on around them, and seek to EDUCATE others to what’s CERTAINLY about to happen….an idiot, possibly even a CONgressman, could see what’s about to happen to U.S…..why are YOU here?
What me worry! I’m just a freckle faced redhead redneck. This means war! Duck and cover. Life is so complicated. Gotta get away from the complicated life son.
The only interesting tidbit here is some of Europes oldest most entrenched banker families are headquartered in London.
Most of BREXIT will be uneventful. It’s the subtle financial stuff that is important to watch.
Time to add just one more box to the stack, perhaps some stuff with lots of flavor and piazzas.