JP Morgan: we’ll only move jobs from UK after Brexit if EU forces us – The Guardian

JP Morgan: we’ll only move jobs from UK after Brexit if EU forces us – The Guardian

The worldwide boss of JP Morgan said on Tuesday that the Wall Street bank would only have to move thousands of jobs out the UK in response to Brexit if ordered to do so by the EU.

In the run-up last year’s referendum, Jamie Dimon had warned that up to 4,000 roles would be at risk in the event of a vote to leave.

Speaking at a conference in Paris, Dimon said the initial response would require several hundred jobs to go – but the final number would depend on the demands imposed by the EU’s regulators and politicians.

Some 16,000 staff are employed by JP Morgan in the UK – including 4,000 in Bournemouth – and around 75% of the business they conduct is for EU companies, Dimon said.

Dimon said JP Morgan had to be ready for hard Brexit – whether it was likely to happen or not. “It’s easy we plan for that … all it means is that several hundred jobs have to legally be done through an EU sub[sidiary],” he added.

He said JP Morgan could handle most of its activities this through its existing operations in the EU in Dublin, Frankfurt and Luxembourg.

The bank is buying a landmark office block in Dublin that could house 1,000 staff, double its current workforce in the Irish capital.

Dimon said: “People should focus more on the second step … What happens next is totally up to the EU. It’s not up to Britain.

“If the EU determines over time that they want to move a lot more jobs out of London into the EU, they can simply dictate that. The regulators can dictate it, the politicians can dictate it,” he said.

“If regulators say one day ‘we’re not comfortable with your risk people, your lawyers, your compliance being in the UK,’ they can make us move it. ”

Dimon was speaking on a panel alongside Stuart Gulliver, the chief executive of HSBC, who confirmed the bank’s plan to move 1,000 roles to Paris – out of 43,000 – in the event of a hard Brexit.

The conference – in which Paris is making a pitch for financial services business – is being held just days before the Bank of England’s deadline for hundreds of banks and fund management firms to submit plans for how they would cope with a hard Brexit.

Warning of Economic Crisis, Top UK Liberal Democrat Predicts Anti-Brexit Backlash – U.S. News & World Report

Warning of Economic Crisis, Top UK Liberal Democrat Predicts Anti-Brexit Backlash – U.S. News & World Report

By Kylie MacLellan and William James

LONDON (Reuters) – Britain is heading toward a new economic crisis which could raise popular support for anti-Brexit parties, the former business minister and likely next leader of the pro-EU Liberal Democrats said on Tuesday.

Vince Cable, currently the only candidate in a contest to lead the Liberal Democrats, said that historically low interest rates had left the British economy too reliant on cheap money and many people would be hit by rising rates.

Britain’s two main parties – the governing Conservatives and main opposition Labour Party – have thrown their support behind the 2016 referendum vote to exit the European Union, promising to negotiate a good deal with Brussels. The Liberal Democrats have instead argued that Britain may yet change its mind.

“There is something here which is not sustainable and it is going to hit us very hard,” Cable, who holds a doctorate in economics, told reporters at a lunch in parliament.

He said an economic shock would spread doubt about whether the Brexit vote, which Prime Minister Theresa May has taken to mean a withdrawal from all key EU structures including its single market and customs union, was a sensible decision.

“We are getting into an environment where economics comes back to center stage…People didn’t vote to be poorer and when they find that that’s the environment in which they are in, I think the whole political chemistry around this subject will radically change,” he said.

Cable, who last week said he thought Brexit might never transpire because the main political parties are too divided over terms for quitting the EU, said his party would be in a strong position to break through when that happens.

“We are not going to advance by small incremental steps – that is not my objective, it is actually to make a breakthrough,” he said.

“The electorate is very volatile, they have been offered two alternatives neither of which I think are convincing and plausible and I think if we get the messaging right…, we have an opportunity to break through the (political) middle.”

Cable served as business minister from 2010 to 2015 when the Liberal Democrats were the junior partners in a coalition government led by then-Prime Minister David Cameron’s Conservatives. Cameron resigned after a narrow majority rejected his “Remain” campaign in the referendum.

The Liberal Democrats’ influence has since waned and they now hold just 12 out of 650 seats in parliament. Ahead of last month’s election they campaigned to give Britons a second referendum on Brexit once the final deal has been agreed.

Cable – credited as predicting the 2008 banking crisis – said he did not think the economic impact of Brexit would be comparable to the global financial crisis as banks were stronger now.

“It’s different, it’s a more longstanding, agonizing problem,” he said, highlighting low levels of productivity as the central underlying problem in the British economy.

“It’s declining. We are weak relative to other countries … The underpinnings are weak. All this boastful talk about ‘Britain has a terribly strong economy’ – I’m sorry it’s just not true. There are some fundamental weaknesses.”

(Editing by Mark Heinrich)

Copyright 2017 Thomson Reuters.

Impact of Brexit, US politics being felt by fintech firms, says Western Union’s head of partnerships – CNBC

Impact of Brexit, US politics being felt by fintech firms, says Western Union’s head of partnerships – CNBC

She said that she was concerned by Trump due to the president’s anti-globalization sentiments.

Hamilton said that Brexit, too, worried her in regard to investment in fintech and the kind of “cross-border” approach to finance that companies such as hers rely on.

She said that, although negotiations surrounding the U.K.’s exit from the EU are “still fairly early,” “this particular question around the movement of people as well as the ability for the U.K. to do business with the EU in an easy way as it is today is going to drive how the market responds to it more broadly.”

Hamilton added: “I do have some concern for the fintech industry.” She referred to a report by the independent fintech industry body Innovate Finance, which saw venture capital investment in U.K. fintech startups fall by 33.7 percent last year. On the other hand, venture capital investment in fintech globally rose by 10.9 percent.

“Clearly there’s been an impact in the U.K. already, and that’s something that we just have to watch very carefully,” Hamilton said. “As far as the overall rise of protectionism (is concerned), I think there was quite a lot of concern after Brexit and the U.S. election.”

Ryanair chief Michael O’Leary to discuss Brexit effect on aviation –

Ryanair chief Michael O’Leary to discuss Brexit effect on aviation –

For example, ‘No deal’ could see Britain crash out of the Single European Sky agreement, which allows EU airlines to run domestic flights in other EU member states.

This could prevent a British airline running flights from, for example, Marseilles to Paris and reduce competition. While it would likely hit UK’s Easyjet, Ryanair would be unaffected as Ireland is an EU country.

Without an agreement in place, Britain would also no longer be a member of the EU-US Open Skies pact. The agreement allows US and EU aircraft to land on each other’s airports, meaning Britain would have to strike a separate deal with the Americans.

We are in a time of national crisis with Brexit, and this calls for a national government – The Independent

We are in a time of national crisis with Brexit, and this calls for a national government – The Independent

Should a ‘national government’ be formed? This would be the robust version of the Prime Minister’s invitation to the political parties to “come forward with your own views and ideas about how we can tackle” the challenges the country faces. Her proposal was immediately poopooed.

The difficulty for May was that the very reasonableness of what she put forward – “we may not agree on everything, but ideas can be clarified and improved and a better way forward found” –barely concealed a trap for the opposition parties. They were being asked to prop up May’s minority Government without receiving anything in return.

A national government is a coalition of the major political parties, so there is something in it for each of the participants. National governments are formed only in response to a crisis.     Thus during the twentieth century the two World Wars were conducted by national governments. During the Second World War, for instance, Clement Atlee, the leader of the Labour Party, was deputy prime minister to Winston Churchill. However, there was a third example, which is the one that is significant today: the national government formed in 1931 in response to the onset of the Great Depression.  

The Wall Street crash in October 1929 marked the start of the crisis. Labour had won the most seats at the general election of that year but its leader, Ramsay MacDonald, like May today, lacked an overall majority. Unemployment began to rise sharply. The volume of exports almost halved between 1929 and 1931. Part of the reason for this was that the value of the pound sterling was kept unreasonably high by its link to the price of gold, the so-called ‘gold standard’. Meanwhile the government was trying to balance the budget – an article of faith until Keynes showed that to do so in all circumstances was futile. At the same time the costs of rising unemployment had to be financed.

But that a government is facing a particularly difficult set of challenges isn’t a sufficient reason for forming a national government. The circumstances have to be intractable. Indeed in 1931 the economic situation did continue to deteriorate. While the Labour government agreed in principle to tighten its belt further by raising taxes and cutting public expenditure more widely, an independent report raised fears that balancing the budget would be extremely difficult. Foreign investors began to withdraw their funds from London.

What happened next created the circumstances in which the formation of a national government could be contemplated. For the Cabinet could not agree what to do. The Cabinet was split 11 – 9 on the question whether to introduce tariffs (thus undoing the free trade principles that had guided British policy for nearly a century) or to make 20 per cent cuts in unemployment benefit (thus risking civil unrest). The Government resigned expecting that it would be succeeded by a Liberal/Conservative coalition.

But the Liberals didn’t want to become prisoners of the Conservatives (as they became in David Cameron’s coalition). The adept Conservative leader, Stanley Baldwin, also had his reservations. He didn’t want the unpopularity of harsh measures to be directed at his party.   And he rated MacDonald highly, unlike Corbyn’s open scorn of May. So, for want of a better solution, MacDonald was asked to lead a National Government comprising four Labour members, four Conservatives and two Liberals. It proved a durable arrangement.

What, then are the conditions today under which the formation of a national government would make sense? First there has to be a severe national crisis. That surely is a fair description of our present state in which a minority government led by a discredited Prime Minister is attempting to negotiate a Brexit deal. The second condition is that the government of the day cannot carry on. We have virtually reached that situation. All contentious items have been stripped out of the Government’s programme. And third, that a conventional coalition is unavailable. That is the present situation for neither the Conservatives nor Labour can hope to strike coalition deals with the Scot Nats or with the Lib Dems

Everything is in place, therefore for the creation of a national government except for one crucial element. Who would lead it? Who would play the Ramsay MacDonald role? He was, after all, highly regarded by members of all parties. But nobody today can command such authority. Not May, not Corbyn. So for the time being, we shall have to blunder on as we are. The real crisis is that, for the time being at least, we don’t have politicians who can rise to the level of events as their predecessors did in the early 1930s.