I have a friend whose economic and financial analysis is always interesting because it is apolitical. He is a former City economist with decades of experience. Unfortunately, like many people who have something genuinely valuable to add to the conversation, he prefers to protect his privacy in our turbulent political and cultural landscape. But I’ve always found his explanations and insights useful and I think you will as well. That’s why he’ll be contributing to my Substack from time to time as the Anonymous Banker.
There is nothing more amusing that watching the EU proclaim on various occasions that Euro clearing must move from London to the EU by date X. Again and again pushing date X out each time.
I look into the EU and wonder where this complex clearing infrastructure and people to do this are? I can't see it can you ? Are they hiding it in a mountain (maybe the French alps)?
I've looked. I can't even see the plan to build it. It doesn't exist. I asked this question of senior banking exec in Dublin, que nervous laugh and shuffling of feet.
Here's a secret. This stuff costs vast amounts of money to build. The banks have spent the GDP of European nations building their clearing and settlement infrastructure and they have ZERO incentive to bin all that and rebuild it in sleepy Frankfurt. Zero. The warm words of farmer McGuinness will not cause them to spend 100s of millions of dollars for increased risk.
Its all BS.
London remains an amazing city 🙌🏼