Morning Coffee: The cunning plots to save the City of London from Brexit. Goldman partner's sandwich epiphany
Today is D-day - Theresa May is about to pull the trigger on Article 50 to get the UK's formal exit from the EU under way. But, as the City of London awaits a potential dreaded hard Brexit, there are some reasons to believe it's...going to be OK.
Well, sort of. If last week was all about U.S. investment banks speeding up the movement of people out of London into continental Europe, now senior executives in U.S. investment banks are supposedly talking about slowing the whole thing down. The Financial Times reports that American bankers speaking on the sidelines of the World Economic Forum at Davos in January said that even in a worst case scenario, the first stage would involve setting up the necessary legal entities and regulatory approvals while keeping things flexible. This would "cost hundreds of millions of dollars but not a lot of people moving."
Instead, the loss of thousands of jobs is likely to occur in the second stage once the UK firms up trading arrangements with the EU. This could take years. “This is going to take a lot longer than people think,” the US executive said. “This is about real people and real people have to make decisions.”
Better still, economist Professor David Blake has just produced a huge, 177 page report called Brexit and the City - which he claims has been ignored by mainstream media - in which he states that London could become an even bigger financial centre after the UK's exit from the EU. Blake's principal argument is that the loss of passporting means that the City is freed from the shackles of regulation and is therefore even more appealing to international banks looking to do business in Europe.
“I feel like a Russian dissident,” he told Reaction. “In this case it’s not the Soviet state that is covering up my work but the Treasury, the big City voices, the US banks and their lobbyists in Brussels and powerful newspapers that are still arguing for Remain. They can’t get over what’s happened. This is a continuation of Project Fear. ”
Blake's position has been supported by another report out yesterday by the CEO of consultants Opimas, Octavio Marenzi. Much of the regulatory headache "such as EMIR, the appropriately named MAD, CRD, AIFMD, MAR, and the truly awful MiFID II" have been "foisted" European financial services firms by Brussels, he says. Brexit is therefore an opportunity for the UK to tear up the rule book and start again - deregulation is coming to the U.S., after all, why not the UK?
This, Opimas says, is the likely impact on jobs - 40,000 created in London, largely trading roles, rather than 37,000 lost under third country status (or the result of a hard Brexit) or 8,000 jobs exiting the UK if it manages to secure regulatory "equivalence".
All of this has to be tempered by the fact that many banks - think UBS, Morgan Stanley and Goldman Sachs - are reportedly already moving jobs out of London.
Separately, Goldman Sachs partner Clare Scherrer says that if women want to succeed in investment banking, they need to get in front of clients as soon as possible to break down any preconceptions that they might have. She told a Goldman podcast - reported by Business Insider - that the CEO of an Italian company in Milan got upset about a woman coming to the meeting because he hadn't booked them into a nice restaurant. It's OK, she says - sandwiches were just fine.
"And we got to the company, we started the meeting at the cafeteria, eating sandwiches," she said. "Fifteen minutes into the meeting, he no longer was focused on me being a woman; he was focused on my content. He was focused on the fact that I actually knew the most about the topic he wanted to cover within the Goldman Sachs network, and the cover of the book didn't matter; the content of the book is what mattered."
Goldman Sachs partner Joanne Hannaford has been promoted to head of technology for EMEA and Asia (Business Insider)
And promoted two new heads of restructuring (Reuters)
The Qatar Investment Authority is expanding into the U.S. and continuing to invest in the UK (Bloomberg)
The UK's Financial Conduct Authority is going start naming individual traders (Bloomberg)
"The combination of machines replacing traders where they can and cutbacks overall in financial institutions in terms of budgets has made it difficult for all vendors frankly to maintain [terminal numbers].” (Financial Times)
Coming together and exposing workplace bullies is the way to stop them (Guardian)
Firms asking for college degrees for menial jobs (WSJ)
Investment banker Ken Moelis has donated $10m to Wharton for liberal arts graduates to study for an MBA (WSJ)
Photo: Getty Images