Quote:
Originally Posted by TheDaddy
Do you really think they'll leave, perhaps I'm being silly but I just can't see them uping sticks and leaving London for some Malayan backwater and more importantly I can't see their families being to impressed either, next time one of these banks threatens it I think we should say "see you then" and see what happens, if they go we can always do a u turn and cave into what ever demands they have to keep the others like we do now.
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Not perhaps the usually most sought place for answers but Wikipedia gives a reasonable insight into London's position in global Forex trading.
http://en.wikipedia.org/wiki/Foreign_exchange_market
If anyone can stand the tedium of reading all the way through it will become obvious that in that particular field we are the major player of first resort. However the EU wants us to apply unilaterally on their behalf and for their benefit a Tobin tax which as it would be unilateral would instantly kill the flow through London and divert all London's business to another major centre with the most likely beneficiary being the USA.
Even after Cameron's NO they still think they can get us through some other loophole and force a tax on anything with a Euro cross. I think they might try and we will have to fight that corner via the courts because one of the largest traded contracts is the Euro\Dollar.
I fail to understand the mixed messages which have come from Merkel and Sarkosy. At one point they saw the tax as a boost to Europe. At another point they desired to stem the supposed volatility of the Euro crosses by taxing transactions but failed to realise that only London came even remotely within their remit. At yet another point they pointed to the fact that London transacts 60% of Europe's financial transactions and thought that as we are not within the Euro it is inappropriate.
They have swung from envious money seekers to blame allocators and the City is the target. They talk as though the Tobin tax is either potentially bountiful or protectionist. On both counts they are wrong. Trade in London would transfer out to the USA which thwarts Tobin tax benefits and any attempt at protectionism would be thwarted thousands of miles away.
As the question posed was would the banks leave. Don't think so but the business would with 100% certainty. The Wikipedia gives the major players but there are plenty more and for sure they have a presence in all of the listed countries involved in that particular type of trade. The American branches could most probably triple their throughput and take all the business from the UK leaving the UK branches to shrink down to deal with whatever was left.
Like it or loath it the City of London is one institutional base we have of great global significance which if destroyed by the pointlessness of envious European eyes would leave us a lot poorer and Europe no richer. I can see no other purpose in Merkel and Sarkosy's demands other than to insist on something which was destructive and to which we could not agree. It was a take the exit door card by people bereft of ideas on how to sort out their own problems and a damaging political manoeuvre within a federalist political agenda.