Barclays Plc is considering moving its global headquarters from London to New York due to the threat of higher capital requirements in the UK, the Wall Street Journal reported on Wednesday.
The bank has had preliminary conversations with U.S. regulatory officials on a move and is conducting an analysis of whether switching its domicile makes sense, the newspaper reported, citing a person involved in the process.
Barclays declined to comment on the report.
Let's be honest - it's time to say goodbye to the likes of Barclays. And without regret.
The risk Barclays poses is about the same size as UK GDP.
And they're threatening to leave because they say they're being too regulated - a thinly disguised reckless demand that we underwrite Bob Diamond's avaricious demand for earnings thousands of times in excess of his contribution to the UK economy that reflects the fact that he and his colleagues have captured this bank for their private gain at cost to the UK, its shareholders and all who work there and bank there.
We have a choice. We race to the bottom at cost to us all. Or we say clear off, knowing that George Osborne's tax reforms mean we can lose no more tax from this source now - he's already given them a free ride on all non-UK profits so there's no loss if they go elsewhere.
The balance has tipped - it's time for Barclays to go.
Maybe HSBC would like to follow.
Then we can reform Lloyds and RBS. And make them the banks we need, free from this absurdity. And if the States wants all the risk - well, let them underwrite it.
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Richard
You are being too extremist.
5% of something, is more than 100% of nothing. You want them to leave 100%? Not do any business at all in the UK? What will fill the gap?
The truth is, you don’t want them to leave 100% the same way that they don’t want to leave 100%. It’s just sabre rattling. The truth is somewhere in the middle, and it’s just a negotiation.
If each time they whinge about too much regulation, our response is ‘okay get out’, then we’re not being good negotiators.
Do you think it’s a ‘crying wolf’ job?
Richard,
There is a good discussion to be had about the desirability of retaining Barclays’ headquarters in the UK, but it should be conducted on the basis of proper facts.
I wonder how you can write that “The risk Barclays poses is about the same size as UK GDP”. At the time of their repsective rescues RBS and Lloyds had blance sheet equal to or larger than Barclays. They required taxpayers- capital to the tune of £70 or £80 billion. There very significant sums, but they are only a timy fraction of UK GDP.
This is the quantum of risk that taxpayers carry in the event of a bank failure. Let’s keep a sense of proportions.
@kimbjo
There is nothing but an extreme here
Either they have their head office here, or not. That’s the choice
I’m not saying their business will leave – even if the head office goes it will make almost no change at all to their business here – or the tax they pay under Osborne’s rules
So I’m looking at the contingent risk and am saying that it’s not worth the tiny amount of extra tax we might now get – so let’s show them the door
And don’t believe for a moment this will mean the UK economy will implode – it won’t. But it might very slightly rebalance – and that would be good news
@DaK
Ask the Irish about that
It’s you who is failing to point out the real risk
Hi Richard… how long will it take for the taxes paid by the ‘too big to fail’ banks to cover the cost of their bail out plus the interest on it? Would be an interesting thing to know, and would help those of us who suspect telling these cowboys they can p*$$ off is no bad thing to financially evaluate our POV. Thanks!
I think I agree with richard on this.
As nils pratley said in the guardian this morning:’The primary job of the government in this context is to ensure the solvency of the country is not jeopardised by having a dangerous banking system….Attempting to compete with the US by copying its lax standards sounds like a disaster in the making.’
Speaking of extremist though, have you seen what the dutch have done with ING.
http://www.guardian.co.uk/business/2011/mar/27/dutch-bankers-bonuses-axed-by-people-power?INTCMP=SRCH
probably not the smartest move but at least its stopped the board paying themselves bonuses.
Richard,
This is a truly terrible comparison. Barclays and the Irish banks have very little in common. The latter are very unsophisticated institutions with excessive risk contentration in their domestic market and in the property sector specifically.
Much better comparables would be the big US money centers; BoA was bailed out (but JPM wasn’t) and again the cost was in the tens of billions, not trillions.
But the very best comparison is with the large Swiss banks. UBS is very comparable in size, exposure and business mix to Barclays. It was bailed out with Swiss taxpayers’ money, again with a few billions (lots of money but no trillions). And despite of this, the Swiss have had NO recession, NO budget deficit or significant austerity program, and have the STRONGEST currency in the G-20.
I do not dispute that there are risks involved, but you are significantly over-playing those.
@DaK
Of course, that’s why the entire liabilities of RBS et al are in UK gov’t debt and are used as the basis for destroying our economy
I see….
Now go and stop deluding yourself
And note that the non-issue you refer to is bringing economies down
Or is such a connection beyond your powers of observation?
Richard,
I very much doubt that all liabilities of RBS will be included in the UK gov’t debt numbers.
The RBS balance sheet is at least as large as UK GDP, so if all its liabilities were included in gov’t debt, the UK’s public debt/GDP ratio would be far higher than the current 65%-70%.
What may be included in gov’t debt are the assets insured under various protection schemes. From memory we are talking about around £200 billion, which is c. 15% of GDP. This is a lot of money undeniably, but let’s not forget that the gov’t is handsomely rewarded for underwriting this insurance.
The comparison with UBS made me think further. To avoid a repeat of the UBS bailout, the Swiss government has imposed a punitive “Swiss finish” to Basel III requirements for UBS and Credit Suisse (which like Barclays did NOT require a public bailout). Although this is painful, neither bank is seriously suggesting re-locating as a result.
Obviously the banks see value in being headquartered in Switzerland, but Barclays and HSBC do not see the same value in the UK.
Yet again, it seems like the Swiss are doing something well and the UK is not. Can we learn from this. After all, both the UK and Switzerland are very small economies with large financial industries, but Switzerland seems to be managing it far better than us.
Under Gideon’s mad plans, most of us have big financial pain, much bigger than necessary, to look forward to and, for many, it’s already arrived. It seems to me that we have two options as to how we use this pain:
1 Either we allow financial institutions to complete their domination, take over ruling the country and establish a financial elite, at great cost to everyone else, once and for all.
2 Or we stand firm, demand that democracy makes the rules, invite those who don’t like the rules to leave if they wish and focus our efforts on rebuilding a balanced and fairer economy.
Both options will involve hardship but I know where my preference lies: If you don’t like it, there’s the door, please close it as you depart.
Kimbjo, this is absolutely not the time for negotiation, this is line in the sand time. We need to stand up and be counted.