PrefBlog

I have long suspected that the UK’s war on bankers would eventually backfire; perhaps it has been a contributing factor:

The race is on to be the new London.

Unless Britain finds a way to undo its decision to leave the European Union, London’s days as the pre-eminent global financial capital, ranked even ahead of New York, may be numbered.

I spoke this week to several high-ranking executives at major financial institutions that collectively employ tens of thousands in London. While none of them have any immediate plans to move their European headquarters from Britain’s capital, all agreed they would eventually shift a significant number of highly paid employees to cities that remain in the European Union.

The author opines that third place in the Good Job Sweepstakes goes to Vienna; second to Frankfurt; and first to Amsterdam:

Not only do 90 percent of the Dutch speak English, many speak it better than the English themselves. Its schools are ranked the best in Europe, and there are plenty of English-language options. The city has beautiful architecture and housing options, picturesque canals, excellent restaurants, music and theater, lively night life, and a cosmopolitan and tolerant attitude cultivated over centuries as a major global trading center.

It has one of Europe’s best airports, ranked just behind Frankfurt and Vienna, and an excellent rail network connecting major European capitals, including London. It’s a short train ride to Brussels, the capital of the European Union.
…
The problem? Badly hurt by the financial crisis, the Dutch have capped bankers’ bonuses at just 20 percent of their annual salaries — a far more drastic curb than was imposed by the European Union. Several bankers told me that unless the Dutch repealed the cap, they wouldn’t consider moving to Amsterdam. “I’d love to relocate to Amsterdam,” one top executive told me. “But I don’t think we’re wanted there.”

Out of curiosity, I examined the same criteria and scored London itself. The result?

London earns a near-perfect 58 points. The only black mark was its quality of life, primarily because of its high cost. Mercer ranks London just 39th (New York ranks 44th).

But Brexit brings to the US one benefit … which central bankers might consider more of a problem:

Mortgage rates hit a new low for the year, falling to 3.48 percent after Britain voted for a divorce from Europe. Last week, the average 30-year fixed-rate loan was 3.56 percent, according to Freddie Mac. A year ago it was above 4 percent.

We’re this close to the record low 3.31 percent rates posted in November 2012. Back then, borrowing costs hit rock bottom because there wasn’t much demand for loans in the wake of Hurricane Sandy. Stock prices were falling, too, sending big investors in search of a safe place to park their money. That flight to financial safety typically sends mortgages rates down.

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And that’s it for another month! Have a good long weekend, folks!

This entry was posted on Thursday, June 30th, 2016 at 10:03 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.