US News A bad Brexit deal for City is worse than none at all

19:45  16 april  2017
19:45  16 april  2017 Source:   The Financial Times

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The mantra within the British government as it prepares to hammer out the terms of its break-up with the European Union is that no deal is better than a bad deal . Then there’s the City of London — a global hub of finance No deal would also further punish industries likely to be hamstrung by Brexit .

17 thoughts on “ Bad Brexit Deal Better Than No Deal ? Of course NONE of the ‘ bad deal ’ Brexit compensations, or should I call them ‘capitulations’ is coming from the sweat of any of the politicians.

Among Hilaire Belloc’s Cautionary Tales for Children is one about a boy named Jim, who runs away from his bothersome nanny at the zoo only to be devoured immediately by a lion. The moral of the verse is simple: it is always to “keep a hold of nurse for fear of finding something worse”.

A police officer seperates a pro-Europe anti-Brexit demonstrator on a March for Europe (L) from a pro-Brexit demonstrator forming a counter protest (R) stood on a wall with a Union Flag in Parliament Square in central London on September 3, 2016. Thousands marched in central London to Parliament Square in a pro-Europe rally against the referendum vote to leave the European Union. They were met by a smaller static counter-protest of those in favour of Brexit. / AFP / JUSTIN TALLIS (Photo credit should read JUSTIN TALLIS/AFP/Getty Images) © AFP A police officer seperates a pro-Europe anti-Brexit demonstrator on a March for Europe (L) from a pro-Brexit demonstrator forming a counter protest (R) stood on a wall with a Union Flag in Parliament Square in central London on September 3, 2016. Thousands marched in central London to Parliament Square in a pro-Europe rally against the referendum vote to leave the European Union. They were met by a smaller static counter-protest of those in favour of Brexit. / AFP / JUSTIN TALLIS (Photo credit should read JUSTIN TALLIS/AFP/Getty Images)

Many in the City of London could be accused of taking Belloc’s comic poem as some sort of metaphor for Britain’s post-Brexit relationship with Brussels. Since last June’s referendum, UK-based financiers have been lobbying tirelessly for some way to preserve the legal privileges afforded by the EU’s “passporting regime”, which permits firms to operate across the bloc, regulated solely from a single location.

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On 5 April 2017 11:31. The Prime Minister was right to say that no Brexit deal is better than a bad one. If they take up none of our offers when we leave we will be like most of the other 160 countries around the world that are not part of the EU.

No deal is better than a bad deal . So it is very difficult to think of any kind of Brexit deal which would be worse than no deal . Theresa May talks of a bright new future with Britain as a low-regulation, low-tax economy building trading links around the world.

Few sectors of the economy have argued harder. The banks have pushed for the UK to stay in the single market outright, or, if that were not possible, to pay large sums for some sort of privileged special access. Alternatives have been anxiously canvassed, such as persuading the EU to grant market access under its “equivalence regime”, which mimics some aspects of the passporting system to markets deemed to have similar rule books.

The determination for the UK to find some sort of negotiated mechanism for preserving access has been total. Almost anything, it seems, is seen as better than simply letting go of nurse.

Now it is not hard to fathom what lies behind this caution. The Brussels nanny might sometimes be tiresome, but bankers instinctively like keeping systems that are familiar, and from which they know how to make money. They shy from changes that they fear could disrupt the investments they have sunk into their firms.

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Your team would much rather shoulder more effort than deal with the wrong person. Great things are easily destroyed by a few bad choices made in a hurry. So, choose wisely, and remember – bad is far worse than none .

The Brexit committee said ministers' claim that “no deal is better than a bad deal ” was “unsubstantiated” until an economic assessment was published.

But that should not blind bankers to the real choice before them with the UK’s departure. The reality of Brexit is that there is no ravening lion round the corner should they give up the passport. Indeed, the City might in many ways be better off simply cutting loose rather than hanging on to some negotiated access mechanism. After all, it is easy to see how a botched deal could actually have pretty unwelcome consequences for the UK’s financiers and banks.

The most obvious risk is that of becoming a rule taker. A poorly cast equivalence deal post-Brexit could in effect saddle the UK with the EU’s rule book without having any say in its contents.

Even before the referendum, when Britain anticipated remaining a full voting member of the bloc, the Cameron government was already worried about the increasingly intrusive system of EU financial regulation, and the possibility that caucusing eurozone members could override the UK’s preferences and impose overly restrictive or counterproductive rules.

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At the top of the list of absurd Brexit advice is the notion that a bad deal is better than no deal . But that's what Andrew Duff at the European Policy Center says. The British side should stop pretending that 'no deal is better than a bad deal '. It is not. In fact, there's really nothing worse than no deal .

Officials have repeatedly, and understandably, said that a Brexit deal must leave the country worse off than it was as an EU member. There is only the whole menu or none .”

With Britain reduced to post-Brexit passivity, these worries would only multiply, going beyond just bonus caps and process-heavy rules that add to the costs of doing business. They would include concerns about the stability of the eurozone that might encourage EU officials to impose restrictions on the functioning of markets — such as short-selling bans and curbs on the ability of institutions such as credit rating agencies to issue “unhelpful” judgments on sovereign issuers and financial institutions. The Bank of England’s governor, Mark Carney, has warned that such outcomes could “cause risk to financial stability”.

Then there is also the risk that the political price of equivalence may ultimately prove excessive. For instance, EU officials have made no secret of their desire to use the process to pull the clearing of euro-denominated securities out of London and back onshore into the eurozone. Were this to be conceded, it could hollow out City markets and cost lots of financial sector jobs.

  A bad Brexit deal for City is worse than none at all © Provided by Financial Times

Leaving cleanly without a deal would not be a disaster. Nor would it necessarily mean fragmenting the Square Mile’s deep markets, with firms uprooting business lines and balance sheets to the continent. The passport is a comparatively recent invention, whose purpose is to reduce the frictional costs of cross-border business. Yet much wholesale activity is either not cross border, or could be structured so that clients came to the City to make deals. That, after all, is how the Square Mile’s powerful position in EU finance was originally built — long before the passport emerged.

It may be that a bespoke arrangement can be struck that would guarantee access on a sensible basis. But if this cannot be secured, the City should not tangle itself in European red tape to preserve a portion of the 20 per cent of its business that is EU-facing. It should slip nanny’s hand, maximise the legal and linguistic advantages that allow it to be competitive, and thus continue to grow its global trade.

Labour's Barry Gardiner Left Red-Faced After GMB's Susanna Reid Reveals 'Remain' Logo On His iPad .
Labour's Barry Gardiner Left Red-Faced After GMB's Susanna Reid Reveals 'Remain' Logo On His iPadLabour’s Barry Gardiner was embarrassed on ITV’s Good Morning Britain this morning after host Susanna Reid revealed to viewers that he still had a ‘Remain’ campaign sticker on his iPad.

Source: http://uk.pressfrom.com/news/world/us-news/-142776-a-bad-brexit-deal-for-city-is-worse-than-none-at-all/

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