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I'm still waiting for Andrea Leadsom's apology to Mark Carney I'm still waiting for Andrea Leadsom's apology to Mark Carney
(about 2 months later)
There was a passage missing from Andrea Leadsom’s pitch for the leadership of the Conservative party: an apology to the governor of the Bank of England, or, failing that, a retreat from the nasty attack on his integrity during the EU referendum campaign.There was a passage missing from Andrea Leadsom’s pitch for the leadership of the Conservative party: an apology to the governor of the Bank of England, or, failing that, a retreat from the nasty attack on his integrity during the EU referendum campaign.
Leadsom was a leader of the leave camp’s attempt to portray Mark Carney as chancellor George Osborne’s stooge. The governor was undermining the Bank’s independence, ran the poisonous argument, by warning of the short-term impact of a Brexit vote on the UK economy and the value of the pound.Leadsom was a leader of the leave camp’s attempt to portray Mark Carney as chancellor George Osborne’s stooge. The governor was undermining the Bank’s independence, ran the poisonous argument, by warning of the short-term impact of a Brexit vote on the UK economy and the value of the pound.
Leadsom’s comments were personal. “As an ex-Goldman Sachs banker, Carney knew exactly what he was doing,” she said. “He has encouraged financial instability and I think that absolutely damages the reputation of the Bank.”Leadsom’s comments were personal. “As an ex-Goldman Sachs banker, Carney knew exactly what he was doing,” she said. “He has encouraged financial instability and I think that absolutely damages the reputation of the Bank.”
To fair-minded observers, Leadsom’s claim was utter nonsense. Carney played by the book. He was careful to speak about Brexit only as it related to the Bank’s remit of promoting monetary and financial stability. It would have been absurd to expect silence. The Bank had to undertake preparatory work in case, for example, sterling fell by 10% against the dollar, as it has done. Thus, Carney had to explain – and be cross-examined on – the Bank’s thinking and analysis.To fair-minded observers, Leadsom’s claim was utter nonsense. Carney played by the book. He was careful to speak about Brexit only as it related to the Bank’s remit of promoting monetary and financial stability. It would have been absurd to expect silence. The Bank had to undertake preparatory work in case, for example, sterling fell by 10% against the dollar, as it has done. Thus, Carney had to explain – and be cross-examined on – the Bank’s thinking and analysis.
Related: Andrea Leadsom's time in the City: high-profile roles yet under the radar
Other prominent Brexiters have sought to build bridges. Boris Johnson, in his infamous Telegraph article, got one thing right: he said Carney was doing a “superb job”. Michael Gove, launching his bid for leadership, endorsed the “wise action” taken by the governor after the vote.Other prominent Brexiters have sought to build bridges. Boris Johnson, in his infamous Telegraph article, got one thing right: he said Carney was doing a “superb job”. Michael Gove, launching his bid for leadership, endorsed the “wise action” taken by the governor after the vote.
Leadsom should have taken her cue from them. She should also have noted that Carney, after his speech last week about the Bank’s post-referendum response, had to bat away questions about his personal position should Leadsom become prime minister or chancellor. A clearly exasperated Carney replied that he had been expressing the collective views on the risks to the economy of 15 members of the Bank’s monetary and financial stability committees. “Does anyone in the country think those risks have not begun to manifest?” he said. “We did our job.”Leadsom should have taken her cue from them. She should also have noted that Carney, after his speech last week about the Bank’s post-referendum response, had to bat away questions about his personal position should Leadsom become prime minister or chancellor. A clearly exasperated Carney replied that he had been expressing the collective views on the risks to the economy of 15 members of the Bank’s monetary and financial stability committees. “Does anyone in the country think those risks have not begun to manifest?” he said. “We did our job.”
Even after that exchange, Leadsom found no room in her prepared speech on Monday to mention Carney or the Bank. There are only two explanations. She may lack the experience or humility to admit she went too far during the referendum campaign. Or she still believes what she said about the governor abusing his office. Either version would be alarming in a candidate to be prime minister.Even after that exchange, Leadsom found no room in her prepared speech on Monday to mention Carney or the Bank. There are only two explanations. She may lack the experience or humility to admit she went too far during the referendum campaign. Or she still believes what she said about the governor abusing his office. Either version would be alarming in a candidate to be prime minister.
Is LSE-Deutsche Börse merger really Brexit-proof?Is LSE-Deutsche Börse merger really Brexit-proof?
“I would like to thank our shareholders for their strong support for the merger,” said Donald Brydon, chairman of the London Stock Exchange, as 99.9% of votes were cast in favour of combining with Deutsche Börse.“I would like to thank our shareholders for their strong support for the merger,” said Donald Brydon, chairman of the London Stock Exchange, as 99.9% of votes were cast in favour of combining with Deutsche Börse.
Well, yes, that’s a thumping majority. Deutsche Börse’s shareholders will probably also give a thumbs up, though perhaps not so overwhelmingly. But that will only mark the start of the fun. The deal is still at the mercy of regulators and politicians.Well, yes, that’s a thumping majority. Deutsche Börse’s shareholders will probably also give a thumbs up, though perhaps not so overwhelmingly. But that will only mark the start of the fun. The deal is still at the mercy of regulators and politicians.
The regulators ought to be the easier hurdle. The structure of the deal is Brexit-proof in the sense that German regulators can continue to oversee the German end of things, and the Brits can do likewise on their own patch. That was the logic of creating a “topco” holding company in which the regulated entities sit underneath.The regulators ought to be the easier hurdle. The structure of the deal is Brexit-proof in the sense that German regulators can continue to oversee the German end of things, and the Brits can do likewise on their own patch. That was the logic of creating a “topco” holding company in which the regulated entities sit underneath.
Related: LSE and Deutsche Börse say proposed merger can withstand Brexit
Politicians are unpredictable, however. For some, the fact that the holding company would be based in the UK is suddenly not a technical detail within a happy “merger of equals”. If political anxiety leads to demands for a domicile in Frankfurt, all bets are off. The partners, assuming they were willing to be bossed about, would have to return to shareholders for a vote on a new structure.Politicians are unpredictable, however. For some, the fact that the holding company would be based in the UK is suddenly not a technical detail within a happy “merger of equals”. If political anxiety leads to demands for a domicile in Frankfurt, all bets are off. The partners, assuming they were willing to be bossed about, would have to return to shareholders for a vote on a new structure.
In that interval, share prices could move, provoking demands for the merger terms to be revised. Quite right, too, since a Frankfurt domicile would be a straightforward takeover by Deutsche Börse, for which the LSE’s shareholders would expect to receive a premium.In that interval, share prices could move, provoking demands for the merger terms to be revised. Quite right, too, since a Frankfurt domicile would be a straightforward takeover by Deutsche Börse, for which the LSE’s shareholders would expect to receive a premium.
LSE’s share price is trading about 8% below the merger terms, illustrating the nerves. That’s understandable. The deal looked Brexit-proof until Brexit actually happened. Now it’s a 50:50 call.LSE’s share price is trading about 8% below the merger terms, illustrating the nerves. That’s understandable. The deal looked Brexit-proof until Brexit actually happened. Now it’s a 50:50 call.
Standard Life’s UK property fund suspends dealingsStandard Life’s UK property fund suspends dealings
The appeal of property funds to retail investors is baffling. First, most well-off punters are already massively exposed to property via owning a house. Second, the illusion of liquidity evaporates when there is a stampede for the exit.The appeal of property funds to retail investors is baffling. First, most well-off punters are already massively exposed to property via owning a house. Second, the illusion of liquidity evaporates when there is a stampede for the exit.
Investors in Standard Life’s UK real estate fund have discovered the latter drawback. The fund manager has suspended dealings after a rush of requests for redemptions. Investors can see that Brexit probably isn’t good news for commercial property prices and they’d like their money back at the old valuation.Investors in Standard Life’s UK real estate fund have discovered the latter drawback. The fund manager has suspended dealings after a rush of requests for redemptions. Investors can see that Brexit probably isn’t good news for commercial property prices and they’d like their money back at the old valuation.
Sorry, but life – or, at least, investment in property funds – doesn’t work so simply. Properties can’t be turned into cash overnight and Standard Life is obliged to protect the interests of investors who wish to stay. If you don’t like the rules, choose a different investment.Sorry, but life – or, at least, investment in property funds – doesn’t work so simply. Properties can’t be turned into cash overnight and Standard Life is obliged to protect the interests of investors who wish to stay. If you don’t like the rules, choose a different investment.