Morning Coffee: "It looks an inspired move to base our European HQ in Dublin." 'Hundreds' of new hires needed
In the event that jobs move out of London after the EU referendum, will Dublin be the beneficiary? At least one firm seems to have decided so.
"The talk in our office is that it looks like an inspired move to base our European headquarters in Dublin," Rob Boardman, European chief executive of agency broker ITG, told Financial News. In the coming weeks and months, ITG may not be the only firm reaching that conclusion.
For a finance firm looking to maintain consistency in its operations, Dublin is an English-speaking, low tax (the top rate of income tax in Ireland is 40%) country where the labour laws are far less punitive than in Frankfurt or Paris. The cost of living is anything from 40% or 60% lower than in London, and salaries are correspondingly 40% less.
"We’ve started to think about how we put people in our existing offices and entities in Europe. We are already rebalancing our footprint,” one senior executive at a large US bank, told the Irish Times, only weeks after Morgan Stanley president Colm Kelleher posited Dublin (or Frankfurt) as an alternative London.
The Financial Times said "big US banks" are, "preparing to shift at least some work to cities such as Dublin, Paris and Frankfurt." However, one consultant told us that Dublin has already prevailed with Citi: "They've just finished moving a whole load of business into their Dublin subsidiary and are presumably feeling pretty pleased with themselves now."
Separately, finance professionals who lose their jobs in London and are adept at negotiating could yet find a home in government. The Sunday Times quoted Lord Kerslake, a former head of the civil service, who said "hundreds and possibly thousands” of new staff would need to be taken on to negotiate Britain's exit from the EU. Writing in the iNews, former deputy prime minister Nick Clegg agrees: "There simply aren’t enough trade negotiators in Whitehall, for instance, with the expertise to renegotiate 50 or so international trade accords," he says. Time to learn about international trade law?
Crispin Odey's private exit poll paid off: he made £220m. (Bloomberg)
Shares of Citigroup fell by more 7% Friday morning, as did shares of Morgan Stanley. Bank of America and Goldman Sachs shares were off by around 5%. (WSJ)
The shares of Italy’s biggest bank (and global systemically important institution), Unicredit, slid more than 23% on Friday. (WolfStreet)
A turbulent start to the open of the London market propelled trading volume as much as 700 percent higher than normal. (Bloomberg)
Once Brexit happens, the UK regulator may push the biggest banks- like Deutsche Bank — to set up a full UK subsidiary so that it can have closer oversight of their activity and force them to hold more capital in the country. (Financial Times)
"Capitalizing subsidiary banks is a very, very expensive business. So you have to decide how big your presence will be....I think people will rethink their business." (MarketWatch)
"It feels like Italy. You would think something like Silvio Berlusconi wouldn't happen here but, in my opinion, this is similar. We came here because it was stable." (Financial News)
Frederic Oudea, president of the French Banking Federation and boss of Société Générale, said the vote would prompt the European Central Bank to demand that euro-trading activities — today done largely in London — move to the continent. “The banks that are only in the UK will not be able to wait.” (Financial Times)
Barclays Chairman: "“The UK is this timezone’s financial centre and will remain so." Ex-SocGen CEO: "This vote should be looked at as a major long-term issue, with much deeper consequences than the Lehman crisis, as it has not only financial but also deep geopolitical consequences." (Financial Times)
"Other countries led by France will ensure any future form of passport will offer far less privileged access to a eurozone market with more protectionist rules." (Financial Times)
'Goldman Sachs has a long history of adapting to change, and we will work with the relevant authorities as the terms of the exit become clear.' (BusinessInsider)
“If you don’t have a [full EU] licence [outside the UK] then you need to start work right away.” (Financial Times)
Finance is a scale business. Given its high fixed costs, the EU can't support two financial centres. (Twitter)
"All the third-quarter deals pipeline is on hold." (Reuters)
Insincere smiles and fleeting sneers can serve as important warning signals against dodgy hedge fund managers. (Financial Times)
Signs that you work for a weak manager. (Forbes)