The above is the latest ominous sign that international financial institutions are not prepared to put up with EU financial regulation that will make them uncompetitive globally. Nigel Farage made this excellent point as well on Adam Boulton's Sky programme yesterday in relation to hedge funds. Mr Farage correctly pointed out that financial services are the UK's biggest industry and that 25% of London hedge funds, under the threat of more EU regulations, are re-locating to Switzerland exactly as I predicted a year ago.
HSBC head office is a large employer at Canary Wharf but Farage's hedge fund point is I think more important. Hedge funds are the start point for much of the M&A activity in the City which provides business for not only HSBC and other banks but also the huge law business that operates in the City. The few hedgies are the rainmakers generating work for many thousands of highly paid city lawyers but who as far as the hedgies are concerned are simply highly paid clerks.
One of the principal competitive advantages of the City is the confidence investors have in the fairness and consistency of British courts decisions irrespective of the nationalities of the parties involved unlike in the US or France. BP is being hung out to dry by the US government and legal system, something that will damage the US in the long run but again driven by the short term expediency of politicians, eg Obama, seeking re-election.
The EU's ill advised banking regulatory 'reforms' are driven by the same self interest of the French in particular. In London this will start to hit the wealthy and influential legal community. The hedgies like swallows can fly off to warmer climes but the lawyers can't. Which profession has more UK MPs than any other? The law! Now that gives us real political clout to start rolling back the EU. K Clarke the main Tory Europhile is a common lawyer. When you have them by the majorities their hearts and minds will follow!