Morning Coffee: UBS's Brexit mistake. Pedants wanted
It's not just Goldman. While the US bank puts the finishing touches to it fancy new European headquarters in London's Farringdon, due for completion next year, UBS is also preparing to occupy its own new London HQ, due for completion sometime in the coming months.
The Wall Street Journal reports that UBS's 5,430 London-based employees are expected to move into its new 700,000-square-foot rented office in Broadgate very soon. Last year. Bloomberg reported that UBS's move was the City's "biggest leasing agreement since 2002" and that the Swiss bank had secured a favourable rent of £54 per square foot.
That's nice - except that UBS might not need all that space any more and London rents look likely to fall. A spokesman for UBS told the Wall Street Journal that the bank has begun a "multi-year process" to respond to the UK referendum. At the end of this, things may look very different. With banks based in the UK likely to be divested of their passporting rights into the European Union and Swiss banks' London operations suffering as a result of the weak pound, now is not the best time to be committing to a multi-year office tenancy. Still, at least UBS doesn't actually own its new European HQ building - unlike Goldman Sachs. In the circumstances, J.P. Morgan's decision last year to make do with the old Lehman building in London looks prescient.
Separately, as we said yesterday, hundreds if not thousands of new jobs in the UK civil service look likely as Britain renegotiates its trade contracts. The WSJ suggests these will be supplemented by equal numbers of new jobs in law firms and consulting firms. The new jobs are not for the faint-hearted, however. "Such work [trade renegotiation] involves tedious hours spent by associates pondering hundreds of rules related to everything from the of migration of honey bees to the making of cheese and the width of tire treads," it warns.
Morgan Stanley: "This event could be discombobulating for eurozone banks if the market fears tail risk of a eurozone break up." (Financial News)
Switzerland's bilateral trade deals with the EU took 30 years to negotiate. (Financial Times)
Clifford Chance: "We expect banks to execute restructuring fairly soon based on ‘worst case’ analysis of the possible outcomes of the exit negotiations.” (Financial Times)
The Cornish et al want London’s money but not its values or its standing in the world. (Financial Times)
RIP Lord Hill's Brussels career: "Lord Hill spent much of his time in Brussels persuading European politicians that Anglo-Saxon finance was not inherently evil." (Telegraph)
RBS shares are at their lowest level since 2009. (Financial Times)
Brexit will lead to more operational, governance and compliance people being moved to centres like Dublin and Luxembourg. (Financial News)
Reasons not to move to Dublin: “I wouldn't underestimate the political risk with Northern Ireland." (CNBC)
John Cryan on London: "The financial center won't die but it will get weaker." (Reuters)
I think my mom gave me the temperament to aggressively pursue jobs I had no business applying for. (Vice)
Move to India. (Bloomberg)
The downside risk is the current account deficit. Or, to put it another way, the capital account surplus. (Medium)