London banks may have been under the impression that they can get away with brass plate operations in the EU after Brexit, in spite of being told some time ago that this is not acceptable. Now the president of the European Central Bank, Mario Draghi, has spelled it out (HERE) that risk has to be properly managed inside the EU.
Coming just as the Brexit negotiations have reached a critical point this may have an impact, both on the banks themselves and the government. Setting up an office with a small number of staff in the EU is (I assume) relatively cheap, easy and quick. But moving larger numbers of staff in risk management and support activities will take longer, bringing forward the point at which decisions need to be made. All the talk of no deal scenarios must be making senior executives nervous.
Separately, the London Stock Exchange has been lobbying for US support to try and block EU moves to get Euro clearing relocated into continental Europe (HERE). I think this demonstrates once again what a weak position we have.
This morning The Guardian are reporting that Mrs May is "close" to offering a new financial deal to try and break the log jam (HERE) following a meeting with Manfred Weber, an ally of Angela Merkel. And David Davis is said to be on his way to Berlin today to make a speech presumably to try and get onto trade talks as soon as possible. Are all these things connected? I think they probably are. Once again it is the UK making concessions - when will the penny drop?
