Brexit's Long Goodbye

The best executives can hope for is more time to put their plans in order.
At Closing, April 26th
1155.00 JPY

Foreign-exchange traders didn't waste much time musing on the complex ramifications of today's court ruling that Parliament must vote before Brexit is triggered. Their response was: BUY.

Brexit Buy

Traders sent the pound higher after the court decision on Article 50

Source: Bloomberg

Intraday times are displayed in ET.

Banking stocks also got a nice lift. European financials extended an already impressive winning streak after the decision, outperforming the broader market in the process.

Banking on Parliament

European financial stocks extended gains after the U.K. ruling

Source: Bloomberg

Intraday times are displayed in ET.

But is the outcome really that straightforward? Probably not. Not least because the government says it will appeal the decision.

Where traders see more certainty, or at least less chance of a messy "hard" Brexit, CEOs in the finance industry are likely to see quite the opposite.

Their priority is to work out how to keep serving clients and keep employees on board in the event that they lose access to the single market. That task has not become any simpler.

Allowing British lawmakers to have their say at the beginning of exit talks rather than the end raises a few possibilities. Not all of them great.

A vote by lawmakers against triggering Article 50 could start a whole new chapter of political instability. If they push for concessions, or more knowledge of Prime Minister Theresa May's negotiating strategy in exchange for approval, it's hard to see bankers being truly reassured. Promising businesses and banks that the U.K. will do its best -- honest! -- to deliver Brexit with as few trade tariffs as possible might ring hollow.

Better to extract concessions in the style of Nissan Motor Co.'s Carlos Ghosn: Face to face and behind closed doors.

The best banks can hope for is probably more time and a delayed process to get their Brexit plans in order. But is that really such a relief? Nobody really knows what those plans should be yet. We've already written that moving staff or businesses too hastily makes little financial or business sense when the contours of Brexit are still pretty unknown. Couple that with elections due in the U.S., France and Germany -- as well as banks' need to execute on cost cutting and structural overhauls -- and you can see why today's ruling doesn't offer that much clarity for finance.

The reaction on the trading floor looks at odds with what is going on in the boardroom.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

    To contact the author of this story:
    Lionel Laurent in London at

    To contact the editor responsible for this story:
    Edward Evans at

    Before it's here, it's on the Bloomberg Terminal.