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On the markets and trading technology:
“Article 50 is part of a broader global phenomenon of nationalism that is breaking out globally. This has profound effects on financial markets as the concept of a single global financial marketplace looks more fragile than ever. Nevertheless in the real world financial market participants need to trade and operate globally. To do so, they need access to real global networks that allow them to deal in whatever market required while normalising any differences between regions including the growing inconsistencies between regulations.”
On the strength of UK as a financial services hub:
“The UK might be Brexiting, but it is not going away. In financial services it’s an integral part of the eurozone. The UK’s dominance is due to many reasons — structural, cultural and legal — and this has taken decades to develop. Trying to dismantle this will not be easy and, more to the point, will harm mainland Europe just as much as the UK.”
On MiFID:
“MiFID is enacted in UK law and MiFID II is due to be rubber stamped by nation states in July, well before Brexit will be thrashed out. Until the UK is actually out, the rules are here to stay. What will be interesting is how the UK reacts if financial services loses out in negotiations to other areas. If our abilities to run efficient, global capital markets from London is hindered through Brexit, things could get interesting.”
More detail on passporting become a "pawn" in political negotiations:
“At the heart of the Brexit and financial markets issue, is the passporting or right of free passage for products and services into Europe. If this becomes a pawn that is sacrificed in the bigger political negotiations over fishing rights, car tariffs or whatever, then the UK might be tempted to start unpicking some of the “sillier” Mifid rules, such as the restrictions on dark pool trading. This, then, would enable the UK to create a more benign, and therefore more attractive, regulatory environment for participants in financial markets.”
On clearing potentially moving to Europe:
“François Hollande’s claim that the trillion dollar Eurodollar clearing business will be repatriated to Frankfurt or Paris makes for a good headline but is easier said than done. First, all the liquidity and traders are based in London but, more importantly, participants have chosen London for other reasons too. They like the legal framework, contracts in English and trust in the British judicial system in the event of a dispute. These are very hard things to replicate and certainly not achievable quickly.”
Or to put it another way:
"You can't just pick up people and infrastructure and plonk them down in Frankfurt. And you certainly can't do that in the next 2 years"
