Editorial: The day after the vote

Author: | Published: 11 Jul 2016
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On Friday June 24, the morning after the British electorate voted to leave the EU, we began to call people for reaction to the news and its impact on London's banks. The contacts were of a type: highly-educated, white, metropolitan – mostly male; exactly the demographic that voted to remain in the EU the previous day.

They had their patch to protect, of course: London's banks have benefitted from the EU's single market more than most. Their vociferous lobbying during the campaign made it plain that they were set on remaining in Europe.

The first call was with an urbane director at a financial markets industry body who spends his working hours in the ears of regulators, arguing the case for his member firms' interests.

He sounded tired. He said he didn't really have anything quotable. "I'm part of the London elite," he said. "I understand how people view me and my reaction to this news as being one of transnational sour grapes. But I just feel very sad – not about the effect on my job, or my industry. I feel sad that I'm not really European anymore." He hung up.

My next call was with a senior partner at a law firm. "I don't know what to say," she mumbled. "My 16-year-old daughter has been screaming at me all morning. She says my generation [that voted to leave] has ruined her chances; she now hates everyone over 55."

And on and on it went: an in-house counsel who said he was trying to be positive for his team, but was finding it hard holding it together; a regulatory lawyer who was too embarrassed to talk to his Spanish senior associate following the vote.

There's usually a time during seismic financial crises or major downturns when someone raises an eyebrow and reminds us that it's all good news for certain lawyers. Those billable hours on the Lehman Brothers liquidation; those CDS contracts to unwind; the raft of post-crisis regulation to first shape, and then comply with. It's all business

And there will certainly be winners. But this crisis seems to be different. While the legal lacunae that will emerge in the UK from the likely invocation of article 50 and subsequent divorce proceedings will keep counsel busy for anything between five and ten years, many regulatory lawyers in London haven't given this is a second thought. The UK and its citizens have lost something tangible with this vote.

Hand-wringing aside, we have of course covered the legal implications of Britain's vote inside this month's issue. Our cover story is essential reading for analysis on equivalence, passporting, tips for what financial institutions should do next, the UK's place in the euroclearing ecosystem and much more.

The issue also features exclusive interviews with Esma's chairman, Steven Maijoor and the EC's director of financial markets, Ugo Bassi. Both reveal policy views on everything from the Capital Markets Union, Mifid II to a harmonised EU insolvency regime. They were, however, less forthcoming about Brexit. Perhaps they're not too pleased about it either.

Tom Young
Managing editor