Junius
After the global crisis of 2008-2009, the reputation of London as a global financial center was severely damaged. At that, Hong Kong is a key generating profits region for HSBC (46% of the total). The Bank was founded in Hong Kong more than 150 years ago, but the headquarters moved to London over time.
HSBC's management came to think about returning to the roots, but devaluation of renminbi and subsequent panic selling in the stock markets of China showed to top managers that it is better not to take hasty decisions, as a new epicenter of the crisis can occur anywhere, including in China. The bank’s press release said that London is still an ideal base for international financial institutions, including HSBC itself.
The move would have cost HSBC from $ 1.5 billion to $ 2.5 billion, which is in itself a little for such a big bank. However, HSBC's experts concluded that Hong Kong cannot provide clear tax and regulatory advantages over the British capital. In addition, influence of mainland China to Hong Kong is being enhanced: the latter has progressively fewer advantages peculiar for a special territory (formerly British colony).
Back in July, Finance Minister George Osborne has lowered taxes for banks so that Britain would remain a "very attractive" place for them. This also had its influence on HSBC’s decision. Yet, experts believe: the main factor is David Cameron’s new brilliant strategy. The prime minister changed date of the referendum on leaving from the EU – now it’s scheduled to this summer.
The results exceeded Prime Minister’s expectations. Donald Tusk, head of the European Council, proposed to introduce double banking standards in the EU. Financial institutions of the euro zone will get a number of new - more stringent - rules. However, banks from outside of the block will enjoy various exemptions. The document listing Brussels’s concessions to London, is in a preliminary form yet, but the proposal itself is quite clear. The document also recognizes the important fact that the EU will remain a union of more than one currency. Those who have not introduced euro, will still have a certain freedom in the field of financial regulation as such.
Experts believe that the European banking system (based in London) and the ECB (Frankfurt) have entered into an agreement behind the scenes, as a result of which the London bankers will have "carte blanche", and banks in continental Europe fall into even greater dependence on Mario Draghi’s authorities.
Returning to HSBC, it is worth noting that it was the first bank, threatening to go to Asia for ever, if Britain goes out of the EU structure. Apparently, the European Commission proposal, obtained by David Cameron, was to the bank management’s liking (since the decision on staying in London was unanimously). In addition, HSBC’s share price fell by more than 30% since April 2015, when the institution began to discuss the move. This fall is mostly related to poor results of the Chinese units, so that HSBC management simply decided not to put all eggs in one basket.
source: qz.com
HSBC's management came to think about returning to the roots, but devaluation of renminbi and subsequent panic selling in the stock markets of China showed to top managers that it is better not to take hasty decisions, as a new epicenter of the crisis can occur anywhere, including in China. The bank’s press release said that London is still an ideal base for international financial institutions, including HSBC itself.
The move would have cost HSBC from $ 1.5 billion to $ 2.5 billion, which is in itself a little for such a big bank. However, HSBC's experts concluded that Hong Kong cannot provide clear tax and regulatory advantages over the British capital. In addition, influence of mainland China to Hong Kong is being enhanced: the latter has progressively fewer advantages peculiar for a special territory (formerly British colony).
Back in July, Finance Minister George Osborne has lowered taxes for banks so that Britain would remain a "very attractive" place for them. This also had its influence on HSBC’s decision. Yet, experts believe: the main factor is David Cameron’s new brilliant strategy. The prime minister changed date of the referendum on leaving from the EU – now it’s scheduled to this summer.
The results exceeded Prime Minister’s expectations. Donald Tusk, head of the European Council, proposed to introduce double banking standards in the EU. Financial institutions of the euro zone will get a number of new - more stringent - rules. However, banks from outside of the block will enjoy various exemptions. The document listing Brussels’s concessions to London, is in a preliminary form yet, but the proposal itself is quite clear. The document also recognizes the important fact that the EU will remain a union of more than one currency. Those who have not introduced euro, will still have a certain freedom in the field of financial regulation as such.
Experts believe that the European banking system (based in London) and the ECB (Frankfurt) have entered into an agreement behind the scenes, as a result of which the London bankers will have "carte blanche", and banks in continental Europe fall into even greater dependence on Mario Draghi’s authorities.
Returning to HSBC, it is worth noting that it was the first bank, threatening to go to Asia for ever, if Britain goes out of the EU structure. Apparently, the European Commission proposal, obtained by David Cameron, was to the bank management’s liking (since the decision on staying in London was unanimously). In addition, HSBC’s share price fell by more than 30% since April 2015, when the institution began to discuss the move. This fall is mostly related to poor results of the Chinese units, so that HSBC management simply decided not to put all eggs in one basket.
source: qz.com
