Jim Price Aero Financial - As ‘Brexit’ Tensions Rise, E.U. Proposal Targets London Finance

 Valdis Dombrovskis, a European Commission vice president, in Brussels on Thursday. “In the context of Brexit, we see that the situation is changing,” he said. Credit Eric Vidal/Reuters 

European Union officials fired an opening salvo on Thursday in a “Brexit”-related dispute that could threaten London’s status as the undisputed financial capital of Europe and affect hundreds of trillions of dollars’ worth of financial products.

In the course of a series of proposed technical changes, the European Commission, the executive arm of the 28-nation bloc, hinted that it may seek a more centralized role in supervising the complex financial contracts known as derivatives when they are denominated in euros. It also suggested that it could institute requirements that clearing houses, which act as middlemen in derivatives transactions, be located within the European Union.

Those rules, if enacted, could force clearing houses for derivatives to be regulated by European authorities even after Britain leaves the bloc, or to relocate part of their operations in order to avoid losing business to competitors.

The proposals, released in briefing documents on Thursday, form part of an increasingly heated negotiating process over Britain’s withdrawal from the European Union. Tensions have played out in recent days in newspapers in Britain and on the Continent.
  

“Of course, in the context of Brexit, we see that the situation is changing,” Valdis Dombrovskis, a vice president of the European Commission, said in a briefing announcing the proposals. Enhanced supervision of such markets had been in the pipeline for several years, he said, but Brexit made the proposals more urgent.

Prime Minister Theresa May of Britain has accused European officials of hardening their stances to “affect” the results of June 8 parliamentary elections. Her speech followed, among other things, a report in The Financial Times that European officials were preparing to ask for a payment of up to 100 billion euros, or about $109 billion, from London to cover its financial commitments as part of its exit.

The negotiations over the financial sector are particularly vital for London — the ability to serve Europe-based clients from London in the so-called single market has been a main driver of growth for Britain’s financial industry. Once the country leaves the bloc, that access will no longer be guaranteed: It will depend on the outcome of the talks.

One important question for financial companies has been the extent to which they will be able to clear and settle transactions in euros, including derivatives, outside the European Union.

Derivatives are financial contracts linked to the future value of assets between two persons or companies. Usually tied to currency or interest rate fluctuations, they are designed to reduce risks for a company or individual holding the underlying asset and are often negotiated privately, rather than traded on an exchange as stocks are.

About three-quarters of all euro-denominated derivatives transactions are cleared through Britain, according to the European Union. Cleared over-the-counter derivatives contracts — privately negotiated transactions that were handled through a firm acting as a middleman — accounted for about $337 trillion worldwide in the first six months of 2016, according to the Bank of International Settlements.

But on Thursday, the European Commission offered a series of proposed technical changes related to the reporting of derivatives transactions. In briefing documents, it said that it would be necessary for firms that “play a key systemic role for E.U. financial markets” to be subject to “safeguards provided by the E.U. legal framework. This includes, where necessary, enhanced supervision at the E.U. level and/or location requirements.”

For More Information:  CHAD BRAY and JAMES KANTERMAY

james price aero financial - Stanford top in MBA ranking for jobs in finance

Alumni of California school achieve best salaries in high-paying sector

Stanford GSB’s full-time MBA is best for a career in finance, according to a new ranking published by the Financial Times today.

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. The Californian school, known for its focus on entrepreneurship and self-development, came top in this ranking of the 50 best generalist MBA programmed worldwide for careers in finance. The ranking was based on responses of graduates working in finance three years after completing their MBA courses, to questions on a range of subjects including salary. Harvard Business School and Judge Business School ranked second and third.

Of all industry sectors, finance is the largest employer of top MBA graduates. Among the top 50 schools in the FT’s overall MBA ranking, more than a quarter (27 per cent) of the class of 2013 work in finance. This is 10 percentage points greater than the proportion of this year’s alumni working in consultancy, the next largest employer. 

The new list is not a ranking of specialized MBAs in finance. The FT used data collected in 2016 as part of the FT 2017 Global MBA ranking and included only those schools with more than 10 alumni working in finance among the respondents.
The programmed were assessed using 13 different criteria, including salary and salary increase of alumni, as well as career progression. The analysis also considered research published by the schools’ full-time faculty in five internationally recognized financial journals. The ranking took into account of the overall proportion of alumni employed in finance; the proportion of those who worked in finance before their MBA and remain working in finance; and the proportion of those who did not work in finance before their MBA, but who do so now.

Twenty-seven per cent of Stanford’s alumni work in finance. Those graduates have the highest annual salary among the top 50 schools at $266,000 a year, a 104 per cent increase on their per-MBA salary, on average. This compares with a weighted average salary of $160,000 a year for survey respondents, which also represents a 104 per cent increase. In addition, Stanford’s alumni ranked top for career progress (see ranking table key).

After graduating, as many alumni leave the finance sector as move into it. Overall, 15 per cent of students who previously worked in other fields joined the finance industry after their MBA, FT analysis shows.

“I transitioned from non-profit work into private equity,” said one graduate from Stanford. “I couldn’t possibly have done so without my MBA programmer — both the skills it imparted and the prestige of the university.”

Darden School of Business ranked 17th overall, but its graduates obtained the highest salary increase, with their annual earnings rising 151 per cent to $162,000 on average. Judge Business School is best for value for money while Kelley School of Business in Indiana, ranked 42, is best for career services. Alumni from Ross School of Business have the highest satisfaction rate at 91 per cent. Stern School of Business ranked number one for its research and was fourth overall.

Melbourne Business School has the most gender-balanced cohort, with 45 per cent of women, while all of Esade’s graduates were from overseas. Alumni from HEC Paris are the most internationally mobile, just ahead of those from Insead.

The 50 ranked schools are from 11 different countries, with more than half (27) in the US. The UK has the second-largest representation with six schools, including Saïd Business School, its other representative in the top 10, in seventh place. China, with four schools, has the third-largest group. Three of these are in Hong Kong and are ranked between 12 and 16.
 

For More information:- Laurent Ortmans