6 ms·

Extremely unlikely. They won't even be allowed to clear Euros.

gumby 7y ago
That need not stop them. London was the pioneer of the Eurodollar market in the 70s, and the US treasury at the time tried to stop that.
- WoahNoun 7y ago
  The Euro didn't exist and the 70's started under the Bretton Wood's agreement. It wasn't until '76 that countries agreed to a floating currency. I don't think London's ability to influence a basket of mediocre pegged currency's gives us any insight into their ability to influence the Euro.
  - deleted 7y ago
    [deleted]
  - caoilte 7y ago
    I don't think you understand what EuroDollar means... https://www.investopedia.com/terms/e/eurodollar.asp https://www.investopedia.com/terms/e/eurodollar.asp
    - WoahNoun 7y ago
      No, I know what the eurodollar is. The power of London over the "eurodollar" at the time was that the businesses and banks in Europe were doing business locally in their domestic currencies (eg Italian Liras) which did not have any international clout. These businesses and banks were effectively forced to go through London Eurodollars to operate internationally to minimize risk. With the introduction of the Euro, none of that matters anymore and London has no power.
      - deleted 7y ago
        [deleted]
andy_ppp 7y ago
It won't matter, people from the rest of Europe will pay handsomely to keep all of their money hidden in pounds.
- mprovost 7y ago
  Not if the pound continues to devalue against the Euro (and everything else).
  - andy_ppp 7y ago
    Why would that continue long term?
    - billpg 7y ago
      Brexit.
      - tylerhou 7y ago
        The long term effects of Brexit should already be priced in.
        jayalpha 7y ago
        You can't price the future in. Only probabilities. Stock options do the same, with a very flawed mathematics (assuming a random walk while having a fat tail distribution). Good luck.
        barrkel 7y ago
        The yo-yo price of the Pound as no-deal Brexit has become more or less likely over the past few weeks demonstrates that Brexit is very much not priced in. No-deal would be so damaging that the markets don't think it's going to happen, and that props up the Pound. So it takes a lot of political madness to convince the market that the worst is happening, and that's when the Pound starts plumbing historical depths. Then the madness recedes, and the Pound bobs back up again.
blibble 7y ago
how exactly do they plan to do that? the EU can ban EU firms from using LCH, but they can't stop firms outside the EU using Euros it'll just end up in a situation like the eurodollar
- jayalpha 7y ago
  https://www.reuters.com/article/us-britain-eu-clearing/eu-steps-up-preparations-for-euro-clearing-in-no-deal-brexit-idUSKCN1NS0OH https://www.reuters.com/article/us-britain-eu-clearing/eu-st...
nbevans 7y ago
Will Euros even exist when such a business plan is already hedging against the EU?
- jayalpha 7y ago
  Well, the UK joined the EU (or the Precursor, the EC) when it was the sick man of Europe. They did three things 1. Joining the EU 2. Making reforms (Thatcher) 3. Found oil in the Northern Sea. The oil is gone and they leave the EU. Lets see how that goes. Please also take this into consideration: https://hbr.org/2019/08/did-austerity-in-the-uk-lead-to-the-brexit-crisis https://hbr.org/2019/08/did-austerity-in-the-uk-lead-to-the-...
  - gumby 7y ago
    A great article, thanks!
  - wozniacki 7y ago
    3. Found oil in the Northern Sea. Interesting. No one mentions this aspect much although its known that UK has oil assets. Could you elaborate on this or add a link to an article that explores this under-mentioned reason as one of the contributing factors for the UK's decision to pull out of the EU? Were the oil revenues very significant in the previous decades? Have they tapered off due to the U.S. shale boom?[1] Did the UK see this development coming? [2] [1] Shale gas in the United States https://en.wikipedia.org/wiki/Shale_gas_in_the_United_States https://en.wikipedia.org/wiki/Shale_gas_in_the_United_States [2] How The Shale Boom Turned The World Upside Down https://www.forbes.com/sites/rrapier/2017/04/21/how-the-shale-boom-turned-the-world-upside-down/#5bb449b777d2 https://www.forbes.com/sites/rrapier/2017/04/21/how-the-shal...
    - jayalpha 7y ago
      "Could you elaborate on this or add a link to an article that explores this under-mentioned reason as one of the contributing factors for the UK's decision to pull out of the EU?" I did not make this statement. But 1. I once saw a graph that showed that the re-rise of the UK strongly correlated with oil production. The correlation does not imply causation but it was quite stunning. I looked several times for the article but did not find it again. But it made me always doubt that it was only Thatchers reforms the reinvented the UK. 2. I did not say that the UK is pulling out of the EU because of sinking oil revenues. But please consider the article that I already posted: https://hbr.org/2019/08/did-austerity-in-the-uk-lead-to-the-brexit-crisis https://hbr.org/2019/08/did-austerity-in-the-uk-lead-to-the-... UK Oil production: https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_the_United_Kingdom https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_the_Un... So there may be a connection (less social services, less income from oil, frustrated people). London voted to stay, it was poor areas that voted "leave".

That need not stop them. London was the pioneer of the Eurodollar market in the 70s, and the US treasury at the time tried to stop that.

WoahNoun 7y ago
The Euro didn't exist and the 70's started under the Bretton Wood's agreement. It wasn't until '76 that countries agreed to a floating currency. I don't think London's ability to influence a basket of mediocre pegged currency's gives us any insight into their ability to influence the Euro.
- deleted 7y ago
  [deleted]
- caoilte 7y ago
  I don't think you understand what EuroDollar means... https://www.investopedia.com/terms/e/eurodollar.asp https://www.investopedia.com/terms/e/eurodollar.asp
  - WoahNoun 7y ago
    No, I know what the eurodollar is. The power of London over the "eurodollar" at the time was that the businesses and banks in Europe were doing business locally in their domestic currencies (eg Italian Liras) which did not have any international clout. These businesses and banks were effectively forced to go through London Eurodollars to operate internationally to minimize risk. With the introduction of the Euro, none of that matters anymore and London has no power.
    - deleted 7y ago
      [deleted]

andy_ppp 7y ago

It won't matter, people from the rest of Europe will pay handsomely to keep all of their money hidden in pounds.

mprovost 7y ago
Not if the pound continues to devalue against the Euro (and everything else).
- andy_ppp 7y ago
  Why would that continue long term?
  - billpg 7y ago
    Brexit.
    - tylerhou 7y ago
      The long term effects of Brexit should already be priced in.
      - jayalpha 7y ago
        You can't price the future in. Only probabilities. Stock options do the same, with a very flawed mathematics (assuming a random walk while having a fat tail distribution). Good luck.
      - barrkel 7y ago
        The yo-yo price of the Pound as no-deal Brexit has become more or less likely over the past few weeks demonstrates that Brexit is very much not priced in. No-deal would be so damaging that the markets don't think it's going to happen, and that props up the Pound. So it takes a lot of political madness to convince the market that the worst is happening, and that's when the Pound starts plumbing historical depths. Then the madness recedes, and the Pound bobs back up again.

blibble 7y ago

how exactly do they plan to do that? the EU can ban EU firms from using LCH, but they can't stop firms outside the EU using Euros it'll just end up in a situation like the eurodollar

jayalpha 7y ago
https://www.reuters.com/article/us-britain-eu-clearing/eu-steps-up-preparations-for-euro-clearing-in-no-deal-brexit-idUSKCN1NS0OH https://www.reuters.com/article/us-britain-eu-clearing/eu-st...

nbevans 7y ago

Will Euros even exist when such a business plan is already hedging against the EU?

jayalpha 7y ago
Well, the UK joined the EU (or the Precursor, the EC) when it was the sick man of Europe. They did three things 1. Joining the EU 2. Making reforms (Thatcher) 3. Found oil in the Northern Sea. The oil is gone and they leave the EU. Lets see how that goes. Please also take this into consideration: https://hbr.org/2019/08/did-austerity-in-the-uk-lead-to-the-brexit-crisis https://hbr.org/2019/08/did-austerity-in-the-uk-lead-to-the-...
- gumby 7y ago
  A great article, thanks!
- wozniacki 7y ago
  3. Found oil in the Northern Sea. Interesting. No one mentions this aspect much although its known that UK has oil assets. Could you elaborate on this or add a link to an article that explores this under-mentioned reason as one of the contributing factors for the UK's decision to pull out of the EU? Were the oil revenues very significant in the previous decades? Have they tapered off due to the U.S. shale boom?[1] Did the UK see this development coming? [2] [1] Shale gas in the United States https://en.wikipedia.org/wiki/Shale_gas_in_the_United_States https://en.wikipedia.org/wiki/Shale_gas_in_the_United_States [2] How The Shale Boom Turned The World Upside Down https://www.forbes.com/sites/rrapier/2017/04/21/how-the-shale-boom-turned-the-world-upside-down/#5bb449b777d2 https://www.forbes.com/sites/rrapier/2017/04/21/how-the-shal...
  - jayalpha 7y ago
    "Could you elaborate on this or add a link to an article that explores this under-mentioned reason as one of the contributing factors for the UK's decision to pull out of the EU?" I did not make this statement. But 1. I once saw a graph that showed that the re-rise of the UK strongly correlated with oil production. The correlation does not imply causation but it was quite stunning. I looked several times for the article but did not find it again. But it made me always doubt that it was only Thatchers reforms the reinvented the UK. 2. I did not say that the UK is pulling out of the EU because of sinking oil revenues. But please consider the article that I already posted: https://hbr.org/2019/08/did-austerity-in-the-uk-lead-to-the-brexit-crisis https://hbr.org/2019/08/did-austerity-in-the-uk-lead-to-the-... UK Oil production: https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_the_United_Kingdom https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_the_Un... So there may be a connection (less social services, less income from oil, frustrated people). London voted to stay, it was poor areas that voted "leave".