Bankers welcome Boris, lament lack of moderate left option
There are celebrations in the City of London this morning. It's not so much that Boris Johnson and his 'Get Brexit Done' mantra have been elected, as that Jeremy Corbyn and his 'greedy bankers' incantation have been defeated.
"People in the City don't want Brexit to happen. If Labour had been more towards the centre and Corbyn wasn't the leader, it would have got more votes from people here - including myself," says one Citi VP, speaking on condition of anonymity.
Corbyn and his supporters would likely see the alienation of financial services professionals whom they refer to as "speculators and gamblers" as a badge of honour. However, many in the City are more left-leaning than might be supposed. As one managing director told us last year: "I am happy to pay taxes and to support those in need and I have always done so." Corbyn however, seemed to be "deliberately targeting people like me" for opprobrium, added the MD.
Bobby Vedral, the former Goldman Sachs partner who managed cross asset global market strats for Goldman's securities division, predicted Johnson's win. He notes that Tony Blair's ability to win over the City was an important factor in his success. "That was Blair's great move: he starved the Tories of funding by convincing the City that he meant business with his approach of, 'I don't care how rich you are as long as we all do better.'"
If anything, Corbyn's Labour party appeared to shift further to the left between the 2017 and 2019 elections, says Vedral. "In 2017 John McDonnell was actually quite reasonable. His massive move to the left at the Labour Party conference in September was a big surprise."
One managing director on the trading floor of a U.S. investment bank says Johnson's victory is, "Not what I would have wished for." He adds: "I think Labour and the Lib Dems ran a terrible campaign. The Conservatives targeted the Brexit seats, but it was never clear what exactly Labour were targeting."
Johnson's success could be a double-edged sword for the City, which will now face certain Brexit. However, one director at a Japanese bank says the large Conservative majority could give him the, "flexibility to escape the hardline "ERG" types and to negotiate a softer Brexit."
Most of those we spoke to this morning said Johnson's big win should at least lend some stability to the U.K. for the next five years and that this will be good for banking and for banking jobs. "I could see no other way for the UK to get out of its political gridlock in parliament," says one MD at JPMorgan. "Finance values certainty," says Vedral. "This result will drive hiring and investment," says Zaki Ahmed, a director at headhunting firm Financial Search.
"I think this is the best result," says one managing director in equity research. "No hung Parliament, no chance of a Corbyn PM, and a decent chance that both Tories and Labour will now move towards the centre ground - Labour with a more moderate leader and Bojo now with a long list of working class seats to protect."
Another managing director at German bank says he was "disappointed by the quality of choices" that were on offer. However, he says Johnson was the "least worst option. We can now make plans, forge new alliances and redefine old ones. Let's hope he doesn't cock it up."
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