
HSBC CEO Says Bankers Generating 20% of London Revenue May Move - JumpCrisscross
https://www.bloomberg.com/news/articles/2017-01-17/hsbc-ceo-says-bankers-generating-20-of-london-revenue-may-move
======
davidhyde
Remember that 52% of the UK voted to leave the EU which leaves the other 48%
hurt that you paint us with the same brush. Such a big decision should have
been a two thirds majority. I live in London and work as a software developer
for a big investment bank. These institutions are more IT companies than what
people traditionally think they are. A huge portion of the floors are for IT
developers, a small number for trading and the rest for admin. My point is
that the revenue generation part of the bank could move anywhere but the IT
remains where they can find a large pool of financial software skills. Here
for now.

The big investment banks are struggling to be profitable these days and it has
nothing to do with Brexit or the EU. After the financial crisis in 2007 they
have had to hold more and more capital and be more transparent about their
complex transactions. And rightly so. In order to be competitive they build
software that lets them comply with the regulations as tightly as possible, to
maximize profit. The more the financial regulators see the more they regulate.
Smaller institutions like hedge funds don't bare such a high burden. My
building has been quietly emptying out for two years and so are the others.
The giants are dying but it's not because of Brexit. I see purely software
companies and specialist hedge funds taking over in this area in the future.

Truth be told, Brexit will hurt the EU more than it will hurt the UK and I
won't hold any grudges if the EU member states fought hard to defend their
union. If they impose punishing import and export duties on us then it will
most likely not be out of spite but to protect them from other member states
leaving too. Picture yourself on the other side of the fence, what would you
do?

And one last thing, the EU was created to economically tie as many countries
in Europe together so they would all depend on each other for resources. That
way no one country could start world war three. By design it should maintain
connections and dependencies regardless of what localized people living in it
desire in the short term. Making member states more wealthy and comfortable is
secondary.

~~~
johansch
> And one last thing, the EU was created to economically tie as many countries
> in Europe together so they would all depend on each other for resources.
> That way no one country could start world war three.

To me this is one of the most important aspects. It is so sad to see this
being unraveled.

I would add the quite inspired Erasmus student exchange program to this -
encouraging people to do (parts of) their university studies in a different
European country is a brilliant way to perform cross-pollination both with
DNA/family ties and ideas. I think this could end up being the most powerful
way to guard against future intra-european wars.

~~~
gozur88
The idea trade ties prevent war isn't at all credible. The main combatants of
WW II had robust trade with each other, particularly Germany and France.

~~~
johansch
I was unclear. What I meant is that Erasmus is brilliant for

a) making lots of people in all of the european countries related to each
other in a big, beautiful and complex manner - thus preventing future wars

b) spreading ideas - good for the economies of the countries and the union

------
hodder
They are forgetting the main problem: Traders/Bankers (for the most part) want
to live in London, not Paris.

It is similar to the article on HN a few days ago
s[https://news.ycombinator.com/item?id=13426822aying](https://news.ycombinator.com/item?id=13426822aying)
Montreal is taking over AI. That is highly unlikely to happen as programmers
rather enjoy California.

~~~
Waterluvian
It's interesting how perspective matters so much. I grew up in Ontario, work
for a tech startup here. One visit to silicon valley convinced me that I never
want to work there. I hated the culture, I hated the lazy weather and
accompanying attitude. I hated driving everywhere. I hated the prices.

Winter is probably a huge shock to many, but I think it builds character and
can-do attitude. Plus hockey.

~~~
sologoub
Bay Area probably provides the best access to all things outdoor with a
relatively short distance: \- Water sports/fishing: Ocean/bay, rivers, lakes.

\- Hiking/Camping: Most of CA with deeply varying terrain, from thick forests
to mountains to plains/desert.

\- Snow: Mammoth, Yosemite, Tahoe.

\- Motorsport: Laguna Seca, Sonoma Raceway, Willow Springs.

\- Wine: Napa, Sonoma, Paso Robles and the surrounding areas of each.

SoCal gets a lot of that too, but usually more driving/flying involved.

You also don't get very extreme weather, but you do get earthquakes.

All-in-all, I'd say CA scores really well for all kinds of active lifestyles,
but the big negative is the cost of living coupled with CA taxes. If you don't
mind a bit more cold and fewer jobs (slightly fewer?), Seattle becomes super
appealing.

~~~
komali2
Outside of some silly things that the CA gov does (why does everything cause
cancer lol? Why are there like 15 transit agencies in the bay area?) my move
to here from Texas was like seeing what the world can _really_ be like. In
Houston, if I wanted to hike, I had to wake up early and make a 2 hour drive
for the good ones. Might as well just go on to Austin. If I wanted to camp,
there was ONE good place within an hour drive, otherwise, going on up to
Austin or Enchanted Rock.

But in mountain view, I can go straight from work to Rancho San Antonio. If
I'm feeling a one nighter backpacking trip, Henry W Coe is an hour and a half
drive. Big Sur. That volcanic area north of Berkeley. Dayhike opportunities
are too numerous to count. I love it.

~~~
messick
"why does everything cause cancer lol?"

Because with 150k signatures, you can get any weird ass proposition you want
for a state-wide vote. And in 1986, voters decided that we needed to be warned
about every little thing that might cause cancer.

Prop 65 has nothing to do with the CA gov. It's the voting public that made it
happen.

~~~
sologoub
Swiss have direct voter initiatives and it seems to have worked out well for
them. Even if some may disagree with specific ones.

------
te_chris
While Brexit is, quite possibly, the dumbest thing I'm probably going to see a
nation state do in my lifetime, it is fascinating to live in London while it
all explodes.

Cameron, surely, will have to go down as one of worst, most narcissistic
leaders in the 21st Century. If not, it's a hell of a bar he's set, staging a
vague refendum, excluding the people who it most directly affects (UK
nationals in the EU) from voting and not including some kind of confirmation
option.

Saddest part is the delusion of the British ruling class. That they think
they're somehow going to matter more to the world as a small partner to
China/USA rather than as a dominating member of the EU is hilarious if it
weren't so sad. For context: I'm a NZer living in the UK. We're a small
country at the mercy of big countries with little actual power. That the UK
elected itself to be like us is just ridiculous, but c'est la vie.

~~~
pyb
Yes, plan A is the UK voluntarily making itself a satellite state of the US.
If that wasn't bad enough, a satellite state of Trump's United States.

~~~
godzillabrennus
Trump might take that option. He'd get to actually be an emperor if he ceded
the USA back to the U.K. in exchange for the crown.

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tezza
Their workforce is 266,000 world wide[1] with 48,000 in London. So 218,000
already work outside London

From the article, they are talking about 1000 staff. 2%.

Lloyds of London said the same thing yesterday: 2% of their London staff would
have to move to EU/Ireland

It is interesting that 2% of the staff bring in 20% of the revenue.

\-----------------

[1]
[http://www.bbc.co.uk/news/business-33058957](http://www.bbc.co.uk/news/business-33058957)

~~~
cm2187
They will likely move the front office staff only. Middle and back office are
likely to be less affected. Salary-wise this is likely to be a
disproportionate % than 2%.

~~~
tezza
on the contrary, i think the passporting covers just the settlement of the
securities.

that implies middle office only.

anyone can make an OTC trade anywhere in the world, but the EU regulations say
you cannot exchange the actual shares between parties outside the EU.

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Tick2Time
They will never move to Paris. It's a rhetorical negotiating position.

~~~
krona
Exactly. They even announced they weren't going to move headquarters to Hong
Kong (which is the only real alternative for HSBC, lets be honest) _before_
the referendum result, saying it was mostly irrelevant.

Yes they may move some trading desks. So what? Banks do this all the time.
Take for instance ING which is moving ~60 trading desks to London from
Netherlands, _despite Brexit._

The fact he's announced Paris as the destination seems to indicate to me he
hasn't put much serious consideration in to it.

~~~
simonh
So don't worry about the 1,000 HSBC (and other bank's) traders that will have
to move if we lose Passporting. It's OK because we're getting 60 from the
Netherlands.

I don't think London's status as a financial hub is seriously under threat.
Most of the business we do doesn't rely on EU financial services passporting
rights. But that part which does will have to move, if we lose those rights.
For example clearing trades for exchanges on the continent is another area
where London has hoovered up most of the business from across Europe, but
those gains will have to be unwound if we lose Passporting.

~~~
krona
No passporting rights exist for third-country firms under MiFID, but the
position is set to change when MiFID II and MiFIR comes into force from 3
January 2018.

~~~
simonh
Interesting, I wasn't aware of that thanks. I just did some reading up.

However it looks like to be eligible the UK would have to effectively rubber
stamp all the EU's financial services regulations into UK law, but of course
without any of our current influence as a member over drafting it. So much for
winning back Parliamentary sovereignty!

------
pyb
Seeing the comments, many people are still in denial that some finance jobs
might leave London this year.

This seems strange, considering that even the Prime Minister's position is
that keeping those jobs is not a main priority. She has said that very
clearly.

------
dustinmoris
Such announcements are only hot air as far as I see this. For the next 2 years
London will be in the exact same position as it is today in terms of trade.
The Prime Minister seems confident to work out a great trade deal for London.
Any bank which announces today that they are moving staff today (because of
Brexit) is just looking for a headline, because a smart manager would wait
long enough to see what the trade deal with the EU will look like before
making any premature decisions. Moving anyone in 2017 is therefore stupid when
everyone knows that after triggering article 50 there will be 2 more years
guaranteed to trade under the same conditions as they are today.

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bowersbros
It says 20% of its london revenue, but I was only able to find its worldwide
revenue ($60bn for 2015), anyone know what the London specific revenue was?

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agd
Context: the UK government has decided to abandon the single market.
Businesses are currently lobbying (very stongly) for this not to happen.
That's not to say there's not merit in their arguments, but I would take the
figures with a pinch of salt.

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lancewiggs
In my earlier career I would have loved to earn London salaries and live in
Paris. Paris is - well Paris. An amazing place to live. London is grim and
grey with eternal darkness in winter (if you are working). Paris is 200
miles/350km South and with much better access to the rest of Europe,
mountains, beaches and so on. So if I was at HSBC I would jump at the chance.
Meanwhile HSBC are probably aware that they can pay people less in France than
they need to in London - for the reasons above.

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user5994461
Stupid question: Would anyone be interested in seeing graphs on revenues (and
tax brackets, and explanation on these tax brackets) for London/UK and
Paris/France?

P.S. Just planning my future blog posts'.

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user5994461
Important note to all London developers: The Brexit is making it harder to
attract people from abroad.

And by that, you should understand that it's harder for companies to recruit,
thus the salaries are going up!

~~~
xugo
don't you worry, bojo is on the case right now. The UK will have to accept
more visas from India to get a trade deal. Replacing Europeans IT workers who
were able to negotiate their salaries with low wage IT workers who can't
change jobs at the risk of loosing their visas...

~~~
user5994461
There isn't and there have never been competition from cheap Indian
developers.

~~~
xugo
You're right for IT positions in Banking in London but for the rest of the
country its a different story. Though I remember the big outage due to a
botched upgrade of a batch processing software done by a junior developer in
India
[http://www.telegraph.co.uk/finance/personalfinance/building-...](http://www.telegraph.co.uk/finance/personalfinance/building-
societies/9429028/Nationwide-transactions-hit-by-technical-glitch.html)

~~~
user5994461
Well. I'm right for anything that isn't cheap. Indian are only competing on
the low end of the market.

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omouse
Good.

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branchless
It's Wednesday and HSBC are leaving again! I'm sure they will be happy to move
from the UK, where finance crime is not prosecuted, to the EU.

~~~
tonyedgecombe
This time it was a statement of fact, he said they will move the staff.

~~~
Sacho
The two parts of your sentence contradict each other; a statement of fact must
describe a past event (we moved our office) or current state (we cannot stay
here due to Brexit). "We will move the staff" is a promise or a prediction,
but it has not happened yet.

~~~
danielsamuels
"I'm leaving the office at 5PM today" is a statement of fact, even though it
hasn't happened yet.

"I've got a doctors appointment tomorrow morning" is a statement of fact, even
though it hasn't happened yet.

~~~
Chris2048
That's not entirely True. "I intend to leave the office at 5PM today" is a
statement of fact, it is neither True, or known to be True (epistemological
the same) only once verified to some standard. You _can_ assume "I intend" ==
"it will happen", but that's not a strongly accepted assumption.

------
zigzigzag
It's fascinating how the group dynamics of this whole situation work out.

London provides enormous amounts of financial services to Europe. Around 35%
of all wholesale financial activity in Europe takes place in London. Around
85% of European hedge funds are there. Around 44% of all worldwide euro
trading takes place there and around 70% of all derivatives trading. Figures
from [https://www.thecityuk.com/assets/2016/Reports-PDF/The-UK-
Eur...](https://www.thecityuk.com/assets/2016/Reports-PDF/The-UK-Europes-
financial-centre.pdf)

In other words European companies rely heavily on people who currently live in
London and presumably are settled there.

In any normal situation this would be seen as "The EU wants access to London
based services, we'd better make sure we negotiate that!". However that isn't
what is happening. Instead the EU plans to simply pass new laws (changing the
MiFiD II rules that aren't even implemented yet) in order to force the people
who live in London to sell their homes, pull their children out of school,
learn new languages and move elsewhere. The banking industry is resigned to
this fate and barely even comments on it.

To me this is indicative of the terrifying fanaticism at the heart of the EU.
Talking about it is one of the taboos that Brexit has started to break. The
people who run the EU are utterly, utterly unconcerned about the lives of the
people who work in finance, they're utterly unconcerned about the economic
welfare of European companies that heavily rely on the UK for financial
services, they've refused to take up Theresa May's offer of ruling out forced
expulsions right at the start, and their "plan" appears to be to refuse to
negotiate any kind of cooperation at all until _after_ the two year exit
period is up.

This is not what responsible, mature leadership looks like. This is what it
looks like when people get it in their heads that they can do anything and
nobody can stop them. You can always tell when there's a true fanatic in the
room because the reasonable people start blaming each other for the
"inevitable" consequences of trying to defy the fanatics. Their unbending will
regardless of the cost comes to be seen as a fact of life that just has to be
accepted, and everyone else starts to work around them and even blaming
themselves for it.

Europe will become a healthier place when people in positions of power and
respect start being able to say that the EU is run by fanatics.

~~~
alkonaut
While I don't agree with most of your post, I agree with one thing - the EU
are, and should (must) make an Example of the UK, or I think the union will
fall apart after votes in e.g. Italy.

Whether or not the EU should in fact try with any means to keep the union
together is another question of course. But; assuming that's their goal, then
I consider it pretty reasonable to a) try to rob London of as much financial
business as possible by scaring large corporations into moving to EU cities b)
scare other countries into not leaving the union by demonstrating a bad deal
for the UK c) set tough positions _before_ the Brexit negotiations start
(which may be loosened during the actual negotiations).

As a citizen of another EU country, I completely back what the EU is doing
centrally at the moment, that is, I care less about the lives and careers of
london financial workers, than I do the future integrity of the union. I
_completely agree_ with statements like "They voted out and there has to be
consequences". Not because it is axiomatically so, but because I think tough
consequences are the right choice

~~~
muninn_
The grown up thing to do is to try to make things work for both sides.

~~~
sgift
The grown up thing is to do what's best for your side. If this also happens to
be good for the other side that's okay, but not a priority.

