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@boristrump
Here's a finance-oriented view:
For some people in the City, the debate about the UK’s departure from the EU has focused too much on the negative aspects, such as how many bank employees will be forced to relocate. Too little time, in their view, is spent accentuating the positive and setting out what a strong City has to offer to the UK economy.
A conference in London on Tuesday, called Prosperity UK, was designed to redress the balance. Conceived by Sir Paul Marshall, the hedge fund manager who backed Leave, and former European Commissioner for Financial Services Lord Jonathan Hill, who backed Remain, it aimed to bring together business and academia to debate how to achieve the best outcome for the UK, regardless of how people voted.
Among the big names included was Jeff Sprecher, founder and chief executive of Intercontinental Exchange, whose $36bn market capitalisation makes it one of the world's biggest and most critical operators of financial markets. Mr Sprecher is heavily invested in London. From ICE’s inception in 2000, he has looked to the UK capital to help give his business scale. He has spent more than £4bn in its London operations, purchasing well-known assets such as the Liffe derivatives exchange and the International Petroleum Exchange, whose names have disappeared under the ICE brand. Revenues from its British operations topped $1.4bn in 2015.
Mr Sprecher views Brexit as a potential boon for the UK by allowing it to shift to a low-tax economy and escape the worst effects of European financial markets legislation, some of which he describes as “terrible”. His view is that Britain has a strong hand and should “have a bit of swagger” — although that attitude tends to come more easily to most mid-Westerners employed in the global derivatives market than to British politicians.
He pointed out at the conference that London is the location with the infrastructure, insurance, expertise and capital — and investors want access to it. “Sometimes, if you build a really good store, with really good pricing, people will actually come and all you have to do is advertise it,” he said.
Indeed one of the City’s biggest strengths is trading over-the-counter (OTC) derivatives, which are used by investors to hedge their portfolios against big swings in currencies, interest rates and commodity prices. Underpinning that is the relatively esoteric world of clearing, which manages the risk to the market if a big bank defaults. ICE’s UK clearing house, opened in 2008, was the first new clearing house in the City in more than 100 years and is now its second-largest.
Nevertheless, Mr Sprecher noted the flattering treatment he has been given by other European financial hubs wanting his business — including Frankfurt, Amsterdam and Paris — and contrasted this with the relatively cold shoulder he has had from the UK government. Some of the continental flattery may have been hopeful — ICE already has operations in Amsterdam, which come with a US-EU equivalence ruling, so the company is already well hedged.
But his comments about the government’s attitude may rattle a few. They will also throw the spotlight on Lord William Hague, the former Conservative party leader and UK foreign secretary who has been chairman of ICE’s UK arm since 2015. Mr Sprecher has always favoured proactive employees who are “on message” and he may be hoping that Lord Hague takes the hint. Whether Mrs May and Mr Hammond will adopt Mr Sprecher’s recommended swagger is debatable but it would be no surprise to hear them utter some soothing words for the City in the near future.