There are all sorts of bad consequences of varying probability that could emerge from Brexit: the resumption of hostilities in Ireland after decades of relative peace, traffic jams running from south coast exit points back to the Edinburgh suburbs, haughty Frenchmen parading around London saying “I told you so” when a single euro will buy them roughly 8,303 pounds, the painful realization that Great Britain really is just a small insignificant island off the coast of a continent into whose face it has just spit, and that the rising economic powers of the Pacific rim aren’t all that interest in what U.K. Inc., is selling. But let’s deal with what really matters—and what is really happening already—which is that, in absolute terms, our increasingly irrelevant readers are already getting paid less.
Banks and other financial institutions have to disclose how many people they have who earned more than €1 million each year to the European Banking Authority, the standards watchdog. The most recent data, released by the body this week, showed that the total number of high-earners across finance in Europe fell in 2016 to 4,597 from 5,142 in 2015.
However, more than three-quarters of these people are U.K.-based with pay reported in sterling. There would have been 500 more of them had the pound not tumbled after the U.K.’s vote to leave the EU, the EBA said….
As Brexit gets closer, more of these people who get the highest rewards— and likely pay the most income taxes—could very well swap Britain for elsewhere on the continent.
U.K. Brexit secretary David Davis on Thursday said he envisioned a future trade agreement between the U.K. and the European Union that would levy zero tariffs and relied on each side respecting each other’s regulations on products and services…. Mr. Davis said there was only a “tiny probability” that the U.K. and the EU wouldn’t reach an agreement on Britain’s exit from the bloc.
And the Europeans are totally open to it—those that haven’t already starting considering the Scepter’d Isle a place apart—if only the Brits give up their silly insistence on sovereignty, etc.
EU Brexit negotiator Michel Barnier, in an interview published Wednesday by German newspaper Süddeutsche Zeitung, said the EU would be open to accommodating a softening of position by the U.K. on membership in the customs union and the single market—even if that change of heart occurred after Brexit…. “If Britain decides to change its red lines, we too will change our positions. We remain open. There are no dogmas,” Mr. Barnier said.
The U.K.’s biggest hedge fund lobby is hoping that the undogmatic continentals may be swayed by a little bit of Golden Rule action.
The London-based Alternative Investment Management Association (AIMA) said in a report released on Monday that Britain should “generally opt for an approach that prioritises openness over reciprocity”….
The government has said the EU equivalence system is unworkable as market access to the bloc is granted solely at the discretion of Brussels and can be scrapped at short notice.
Odey’s bet that British bonds are overvalued totals about 173 million euros (£150.8 million), he said…. Odey said the UK economy “has its dangers”, including a large current account deficit and Britain’s exit from the European Union, but that the bet was primarily related to QE.
Brexit Hits Bankers Where it Hurts: Their Wallets [WSJ]
U.K. Calls for EU to Recognize Its Regulation Post-Brexit [WSJ]
Brexit Countdown, Eurostat Edition [WSJ]
Hedge funds call for Brexit openness above reciprocity [Reuters]
British hedge fund manager Odey short UK government bonds on QE bet [Reuters]