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Surely Goldman Sachs already have an office in Frankfurt. It's interesting to me what would fall foul of the new limitations. If the call is taken from someone

Surely Goldman Sachs already have an office in Frankfurt. It's interesting to me what would fall foul of the new limitations. If the call is taken from someone in Frankfurt and they forward it on to someone in London, does that count? How about if they work in a team together? Or if the Frankfurt banker asks advice from someone in London. It seems difficult to draw a line there. I'm not really clear whether it's just about having a local subsidiary for compliance purposes, or whether it literally means no assistance at all, or what.

rvba 6y ago
The bank still has to run according to EU rules so in the long term probably easier to hire people from EU.
LatteLazy 6y ago
They might have an office but they don't have a bank. Why not? Because operating a bank requires a huge amount of capital and a shit tonne of regulatory compliance. Literally 10s of millions in lawyers fees alone. Per year. So no one bothers having more than 1 EU entity. Offices maybe, but not entities. Starting in a week, the London entities that all those big banks set up are useless for offering services to the rest of the EU. This is a big issue because its NOT enough to just get a PO box and register a company. You need to capitalise and regulators want to meet traders. You need to pass the local exams and comply with the local regulations. Otherwise 101 foreign banks would not would have such a big London presence, they'd just run it from their home locations (Hong Kong, New York, Singapore). For a long time, the UK has had a big advantage because the FCA were rapid and easy to satisfy. You could get a bank up and running here in just 2 years for less than 100m. Now you have to justify keeping that office when 80% of its business now needs to be done in Frankfurt, Paris, Dublin, Zurich or wherever. This all seems like a lot of fuss and a bit anti business right? The reason we all (America, Japan, EU, HK, Singapore, etc) do this is because its the only way to avoid major crises with huge knock-on effects. Capital requirements came in to avoid another sub prime bailout. The tests and training and licensing of individuals has grown up after 101 scandals, most recently the rate fixing on fx. Europe especially has learned that under regulation in finance is much more expensive than prudence. And prudence for complex, large, interconnected, opaque, big banks is pricey...
vr46 6y ago
Not that easy, last client was underwriting and they cannot write any business in the EU and their attempt to get licences was rejected last time, so they’re having to run business through another company and somehow finagle paperwork to reinsure it themselves, or something. It’s not easy at all, regulations have ensured that it’s not easy.

rvba 6y ago

The bank still has to run according to EU rules so in the long term probably easier to hire people from EU.

LatteLazy 6y ago

They might have an office but they don't have a bank. Why not? Because operating a bank requires a huge amount of capital and a shit tonne of regulatory compliance. Literally 10s of millions in lawyers fees alone. Per year. So no one bothers having more than 1 EU entity. Offices maybe, but not entities. Starting in a week, the London entities that all those big banks set up are useless for offering services to the rest of the EU. This is a big issue because its NOT enough to just get a PO box and register a company. You need to capitalise and regulators want to meet traders. You need to pass the local exams and comply with the local regulations. Otherwise 101 foreign banks would not would have such a big London presence, they'd just run it from their home locations (Hong Kong, New York, Singapore). For a long time, the UK has had a big advantage because the FCA were rapid and easy to satisfy. You could get a bank up and running here in just 2 years for less than 100m. Now you have to justify keeping that office when 80% of its business now needs to be done in Frankfurt, Paris, Dublin, Zurich or wherever. This all seems like a lot of fuss and a bit anti business right? The reason we all (America, Japan, EU, HK, Singapore, etc) do this is because its the only way to avoid major crises with huge knock-on effects. Capital requirements came in to avoid another sub prime bailout. The tests and training and licensing of individuals has grown up after 101 scandals, most recently the rate fixing on fx. Europe especially has learned that under regulation in finance is much more expensive than prudence. And prudence for complex, large, interconnected, opaque, big banks is pricey...

vr46 6y ago

Not that easy, last client was underwriting and they cannot write any business in the EU and their attempt to get licences was rejected last time, so they’re having to run business through another company and somehow finagle paperwork to reinsure it themselves, or something. It’s not easy at all, regulations have ensured that it’s not easy.