A tale of two Cities? Square Mile divided over Europe

Hedge funds vs Investment bankers – the fight is on

City firms are squaring up to each other in a face-off that could influence how British politicians manage the UK’s relationship with Europe.

In the blue corner the City’s hedge funds are campaigning for the UK to exit the EU, while in the red corner, London’s investment banks are pushing to stay in the Union.

As David Cameron’s government looks to stem the flow of anti-EU voters aligning themselves with UKIP when they head to the polls in May, the Conservative Party is examining whether it may be possible to hold an in/out referendum on Europe in 2016.

This won’t be popular with bankers however, who say that even the threat of a British exit from the EU could seriously damage London’s status as a financial services centre.

Meanwhile, hedge fund managers see an EU exit as desirable due to the extra red tape which membership has meant for them.

Speaking to the Financial Times, Stuart Popham, vice-chairman of banking in Europe at Citigroup, said: “The strength of London lies in its ability to aggregate all the services related to finance. If suddenly some of the services can’t be performed, then the convenience of London reduces over time. If you are no longer able to undertake the entire range of activities, it’s a less attractive place to do business.”

But Crispin Odey, founder of Odey Asset Management, told the FT: “We joined an economic union, not a political union. We don’t want to be part of a more consolidated and federal Europe.”

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Readers' comments (1)

  • Anonymous

    Hedge funds can make money whether Britain is successful or not. So what do they care about whether or not Britain is damaged by leaving the EU?

    If anything, that would enable them to make even more money.

    Hedge fund managers are greedy individuals with nothing but their own interests at heart. As such, they don't represent what's good for Britain.

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