One noteworthy feature of Brexit coverage is British commentators and even worse, officials, reassuring themselves and their audiences that the EU’s firm insistence that the UK will not be able to cherry-pick will melt when they understand that the UK has real bargaining leverage.
Based on the arguments I have seen so far, the Eurocrats aren’t at any risk of these supposed trump cards working out as envisaged. For instance, over the weekend the Telegraph published, George Osborne is threatening the EU with a giant tax haven right on its doorstep. From the story:
Either way, Mr Osborne had a helpful suggestion today. Britain needs to act fast to signal to international investors that it is going to be a hospitable and profitable place to do business. His statement that Britain should aim for corporation tax rate of 15 per cent is not a bad start. That would be a cut of 5 percentage points and give us the lowest rate in the G7 by some margin….
But there’s also another, cannier reason why Britain should do everything in its power to appeal to large corporations that employ people across the EU: it improves our negotiating position. As I’ve written, I believe getting a good deal from the EU is going to be extremely tough, because there are powerful forces on the continent determined not to grant us full single market access if we want any concessions on free movement.
One strategy we should use to loosen their resolve is to give the EU an idea of what an excluded Britain on the edge of the market might look like. And one potential answer to that is obviously: a giant tax haven..
The logic of cutting taxes in response to Brexit is obvious. If the EU decides to make it more expensive and difficult for businesses based here to sell their goods and services into its market, we will need to offset that cost in order to encourage a similar level of investment as we currently enjoy…
The underlying message it sends to the EU is a harsher one: if you wilfully lock us out of your market, you leave us only one way to compete. And you won’t like it.
A top international tax expert dispatched this idea in a terse three sentences. First, the UK’s 20% tax rate is already an inducement…and how many companies are set up there just for the purpose of the tax rate? There are a lot of other factors, like access to raw materials, markets, and quality of workforce that factor into these decisions.
Second, for the UK to be a tax haven, there would need to be no withholding at EU borders. That in turn depends on EU directives and EU/EEA membership. That’s Ireland can be a corporate tax haven. It’s in the EU!
Tax Justice Network addressed variants on this theme in a recent post:
Just before the Brexit vote we quoted Adam Posen, President of the Peterson Institute for International Economics, about what might happen in a post-Brexit Britain:
“If you’re anti-regulation fantasists to begin with, you start going down the path, ‘Oh we can become an even more offshore center. We can become the Cayman Islands writ large, or Panama writ large.’ And this frankly is the way I think this also spills over to the rest of the world, is that the UK decides, ‘Hey, regulatory arbitrage, letting AIG financial products run in London, actually destroyed the US financial system, but didn’t hurt us – made us a lot of money. Let us continue down this path. Let us be the ‘race to the bottom’ financial center. And I think this that’s where this going, because they’re not going to have any other option. It’s not good.”
And this is already being played out. Take a look, just for example, at this quote from Chris Cummings of the extremely peculiar and powerful TheCityUK (and by extension the City of London Corporation), illustrating Posen’s point very exactly:
“It is vital that action is taken to reinforce the global competitiveness of the UK as a place in which and from which to do business. This will help to mitigate the risk of prolonged uncertainty while a new relationship with the EU is negotiated.”
Or calls from London’s mayor to turn London into a mini-state, which would have appalling race-to-the-bottom effects. And we noted yesterday that this applies to tax, particularly corporate as well as financial regulation.
The fools’ gold of corporate tax cuts
The Financial Times this morning is running a headline Brexit: George Osborne to slash corporate tax rate:
“In his first interview since Britain voted for Brexit, Mr Osborne said he wanted a leading role in shaping Britain’s new economic destiny, laying out plans to build a “super competitive economy” with low business taxes and a global focus.”
Or, in the area of taxing rich individuals, take a look at this Financial Times story:
“Brexit could lead to the scrapping of tax rises for wealthy foreigners living in the UK . . . some people may benefit from the need to shore up the UK’s appeal to mobile investors, as well as greater freedom over the design of tax incentives.”
As we have pointed out many times in the past: corporate tax cuts, particularly in the current climate, are the worst kind of stimulus. They reduce economic growth – for several reasons, including these:
a) Corporate tax cuts don’t attract useful investment! This Chancellor, George Osborne, has already cut the corporate tax rate, again and again, over this parliament and the last. As we’ve identified, his government’s own advance assessments, and those of the independent Office of Budget Responsibility, have predicted zero impact on the tax base – that is, no new investment or at least no profit from any new investment that is made. This is consistent with analysis from the US Joint Tax Committee, that profits are only really shifted in response to much more dramatic cuts: you have to get the rate down to 5% or even 1% to compete with the big boys of Luxembourg or Ireland for profits shifted in from elsewhere. Real investment, meanwhile, is driven by fundamentals like infrastructure, labour skills and (yes) market access – tax rates just aren’t a primary concern.
b) Corporations are sitting on cash piles: profits are high but they aren’t investing, because demand isn’t there. Tax away some of those useless cash piles, spend it, and increase demand, thus increasing investment – and growth. Corporate tax cuts are like pushing on a string: if they aren’t investing their cash piles, why would corporate tax cuts help?
c) The lower corporate taxes go relative to income taxes, the more rich people convert their income into corporate forms, to escape relatively higher income taxes. This is a pure, inequality-boosting redistribution – and as the IMF and many others remind us, higher inequality means lower economic growth.
d) The ‘incidence’ of corporate taxes falls largely on capital owners/shareholders: and many of those shareholders are foreigners: over 50 percent in the case of the FTSE 100 firms. The leakage from corporate tax cuts is tremendous. Not only is there this ‘external’ leakage to other countries: but there is upwards leakage too, from ordinary taxpayers to a relatively much wealthier group: corporate shareholders.
e) When they say ‘competitive’ they mean showering goodies on large players, at the expense of smaller, less mobile local players. This hurts the small and boosts the large: increasing monopoly – with the counter-intuitive result that ‘competitive’ tax policies reduce competition. With all the market-harming, inequality-boosting results.
f) Doing this provokes others to follow suit, in a continuous process of ‘tax wars.’
The list does not stop here: also read
- Ten Reasons to Defend the Corporate Income Tax – TJN
Tax haven route won’t work for post-Brexit UK, OECD says – Tom Bergin, Reuters. A slightly confused document, but
New research: ‘competing’ aggressively on tax reduces growth – Fools’ Gold.
It follows from all this that an increase in corporate taxes will boost economic growth. Corporate tax hikes are the one component of austerity that is painless: it’s corporate tax cuts that deliver the pain.
Those who have advocated for tax cuts before – and even KPMG, for goodness’ sakes, one of the top lobbyists for corporate tax cuts – don’t think this is a good idea.
Yves here. The Brits are admittedly just starting to wrap their minds around how a Brexit might work in practice. What is disconcerting is the tendency to try to brush aside rules. As we’ve stressed, the EU is very by the book in how it interprets its laws and regulations. The UK negotiators will be in for an unpleasant surprise if they fail to come to term with that before they sit down for serious talks.
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What’s the big deal? The UK is already home to quite a few tax havens.
During the lead up to the Referendum vote Osborne was nowhere to be seen except for one ludicrous outburst about a special budget increasing taxes etc. As soon as the result was known he dropped his pledge to turn the UK’s deceit into a surplus by 2020 ( an absurd idea anyway ) and reduce Corporation Tax to 15% and say to the spivs and shysters the UK is where you should keep / put your money . But don’t worry as soon as a new leader of the Tories is elected Osborne is toast. But that in itself is a lesser issue ; the big issue is – will the new leader whoever it is have a post Brexit vision, a model , a plan for the UK as a whole. Something all 63 million of us can say at least a tentative ‘ yes ‘ to .
George Osborne:
https://d8s293fyljwh4.cloudfront.net/petitions/images/95711/hero/MiftnyD.gif?1417180224
I doubt that Osborne will be toast. He may be out as Chancellor when the next PM comes in, but he will then get a very well paying job with one of those corporations or financial services firms. This an opportunity to institute something he has wanted to do for a long time – evidence how many times he has done it before.
>>>he dropped his pledge to turn the UK’s deceit into a surplus by 2020
the UK Govt’s deceit is as large as its deficit :) – cf Iraq
England is not Britain. If you don’t know what countries make up Britain then look it up. Not all of the countries that make up Britain voted to leave the EU. Scotland voted 62 – 38 to stay in. Pretty emphatic. The sooner it gets away from the class ridden, backwards looking aristocratic suffocating atmosphere of ‘Britain’ the better. Judging by the speed and breadth of the stupidity that has been happening in England during these past few weeks, that won’t be too long now.
No-one likes a good rant better than I but, for the time being at least, the union (in the UK) still exists. And it is very interesting to note that the SNP has rowed back a long way from any idea of calling an immediate independence referendum. As I have remarked before, Nicola Sturgeon is probably the canniest political operator in the land and will not risk the ignominy of calling another referendum without being sure that the result will be for independence.
Sturgeon — like the rest of us, actually — cannot guestimate the likely result of another independence referendum until the UK’s Brexit settlement is at least partly understood (Scotland would inherit that by default). Then the SNP would have to get an agreement from the EU about the terms for re-entry — it would maybe even have to figure out if it did want to re-enter the EU. There’s a vague possibility that Scotland could be allowed to remain in the EU, but that’s not a given, and it’s not even very plausible. And EU membership means the euro. That will be a tough sell in Scotland.
I’m not saying your heart isn’t in the right place, but alas we don’t always get the outcomes we want, deserve or are fair. While it’s tempting to think that Scotland can try holding its breath ’til its face turns blue, that isn’t a substitute for having an effective post-Brexit referendum strategy. And offering the people of Scotland a choice between one lot of instability and uncertainty and another, different, lot of instability and uncertainty could well result in it sticking with the status quo (UK) instability and uncertainty which I’m guessing isn’t what you’d like to see.
Yes, I think you are right that Sturgeon is playing this very cannily. I was surprised she didn’t go out full guns blazing, but I think its much better for her to let the Tories really screw up the process of Brexit (which of course they will do), and then only push for another Referendum when it will be seen as the pragmatic thing to do. In the meanwhile, she can work on building up allies in Europe – I think that several smaller countries (not least Ireland) will be very sympathetic to the argument that breaking up the UK would be the ultimate revenge for Brexit, and a very powerful warning to other countries thinking of leaving.
I do think however that the real problem for the Union is not Scotland, but northern Ireland. In all the fuss its been forgotten that Northern Ireland has a pretty unique constitutional position due to the the Belfast Agreement, which not just gives a significant role to the Irish Republic, it also incorporates the European Charter of Human Rights, which is something which Theresa May, among others, has said will be jettisoned as part of Brexit (even though it has nothing to do with the EU). There are likely to be multiple court cases over this – Sinn Fein have already said they will be going to the courts to argue that if Brexit effectively annuls the Belfast Agreement, then it cannot stand constitutionally. Given the potential for violence, this could rapidly become very big issue for the government, and could trigger action on Scotland too (I’ve no doubt some NI Unionists would see some sort of link with Scotland as a ‘next best’ option if it looks like the English will jettison NI, which they would do without a backward glance if they could.
Yes this (NI / the Republic) is *so* important I really wish it had more coverage. Don’t know about you, but I’ve not seen anything whatsoever in the MSM apart from token 2 minute newsbites about NI
(typical of the BBC’s efforts [Fiona Bruce, in the London studio] “Mark, where does this all leave the province then?” [Mark Devenport, usual spot standing in front of Stormont] “Well Fiona, it’s grist to the mill of Sinn Féin, the DUP isn’t at all happy with this-and-that, the SDLP has said all sides need to work together and all-in-all, it’s all very uncertain. Back to you in the studio Fiona” …)
I wish I had the knowledge to write it up fully and accurately, it deserves to have it given much more prominence. Thanks for giving the above primer anyway. NI, in terms of Brexit and the knock-on issues, is Scotland squared.
Its actually very hard to find anyone who has written about the deeper legal aspects, probably because nobody has really tried yet to get their heads around it (but Sinn Fein have already said they have commissioned a legal opinion). But this is one view from the normally very anti-nationalist Fintan O’Toole. He has correctly called out that the Brexit campaign is deeply wrapped up with a very specific form of English nationalism. The Northern Ireland unionists might find to their horror that they may be ‘British’ as they claim, but are certainly not ‘English’.
There’s a bit about NI here:
https://ukconstitutionallaw.org/2016/07/02/colin-harvey-complex-constitutionalism-in-a-pluralist-uk/
I’m looking around for something more in depth as well.
Thanks, thats an interesting article. I think that when the real implications of Brexit sinks in to the Northern Ireland establishment they will be deeply worried. First off, they will be stuck with rule by an English establishment that simply don’t give a damn about them and will not hesitate to remove all the implicit subsidies the Province receives, secondly they will realise that the reimposition of the border will have major economic implications (even more so if Scotland leaves).
A lot of important people (including a certain Clinton family) are quite invested in the NI peace process. I wonder if there will be a temptation to seek some sort of ‘protectorate’ status. Not a United Ireland, but a situation whereby NI gets the sort of legal existence of an Isle of Man, but under an Irish ‘umbrella’ membership of the EU. It would be pretty unique, but it might end up being the only solution. Anything else is almost literally unthinkable.
The commitment to EUR on being accepted to EU is open-ended, as in “at some time in future, when ready, we will take EUR”. In practice, it doesn’t amount to much. Only Slovenia and Slovakia from A8 countries adopted EUR – even though it would be hard to argue that the other ones are not ready to do so – Czechs had a floor (in effect a peg) for the last two years, and a monetary policy almost as loose as ECBs (in fact at 0 for longer than ECB).
But it is a commitment. In any possible Scotland independence referendum, the forced-placed adoption of the EU will be harped on about by those wanting Scotland to stay in the union. Independence campaigners who say “oh, well, I know we’re committing to it if we join (re-join?) the EU, but we’ve got our fingers crossed behind our backs and we don’t really mean it” will rightly get lambasted. And in any negotiation with the EU for membership, you can bet they’ll be wise to this being a possibility and will demand a serious timeline. Plus negotiating in bad faith is always a bad idea. Even if you get away with it, you’re rightly treated with suspicion afterwards.
EU didn’t demand a timeline for A8 or Romania/Bulgaria. So you can’t be accused of negotiating in bad faith if you refuse to give a timeline. I agree that If EU did try to strongarm Scotland into fast EUR adoption, it would backfire – and given the EUR politics, it’s far from inconceivable.
But saying “when we’re ready” is what everyone else did – it doesn’t mean EUR should be adopted next year, or in five years, or in a decade. There could be time when it is the right time for Scotland to join EUR (say when there would be joint fiscal union, instead of the hotchpotch it is now). Indeed, the argument could be turned the other way around with “look at Greece for what happens when countries that are not ready join”.
Here is the most important point that Osborne made:
If Yves is right, and she probably is, taxes will not work as leverage. That means that the UK will go back to the drawing board and find something else that Germany “will not like”.
The UK perspective is easy to understand. The EU = Germany. Appeasing Germany in the 1930’s had horrible consequences. The UK is not going to make the same mistake twice. Any German “rules based” demands will be judged by the UK appeasement standard.
Anything that Germany/EU does to escalate the confrontation will be met by UK counter escalation. And, given the horrors of WWII that resulted from appeasement, there is no chance the UK will back down.
The rational option is to get both sides to the table and begin constructive talks. Unfortunately, Merkel is already positioning, if not outright campaigning, for her 2017 elections. Due to her wish to maintain power, she has few or no options to start negotiations.
There does not seem to be any positive way forward until after the German elections. Hopefully, those elections will result in a new government that will have more room to maneuver on negotiations with the UK.
The problem is as a matter of international law(which the UK claims to be the strongest defender of) the only thing the UK is entitled to is plain vanilla WTO MFN status. Everything above and beyond is simply a favor by the EU.
Well we are and always have been members of the EEA since it’s inception. Within the EU we have been direct signatories as a member state of the EU. Assuming entry to EFTA is not denied to us EEA status is retained independent of the EU. EEA rules allow tariff free access to the single market and a unilateral brake on freedom of movement (eg job offer first) although that may not be without EU retaliation. The rules are involved and the EU would need to prove in courts the brake was unreasonable. The EU ref result alone is indicative of social impact. All to play for I guess given where we are.
The EEA Emergency “Brake” is basically a form of “elite” compromise that is totally unworkable and I think will quickly be seen as a charade by both “leave” and “remain” voters. I don’t believe that the UK would be all that successful in the EFTA court in justifying it on the basis of the current conditions in the UK economy. Remember vast portions of the UK are losing population not gaining it. Another think to keep in mind is Norway which is currently the biggest player in EFTA/EEA can veto UK membership in the EEA and Norway very well might if they are concerned the UK is going to come in like a bull in a china shop.
As long as the UK refuses to file “Article 50” then they are entitled to 100% access to the EU markets. As part of exit negotiations the UK will be entitled to whatever deal is ratified by the EU before the “Article 50” paperwork is processed. There is no path leading to plain vanilla WTO MFN status unless the UK is very stupid and files “Article 50” without a EU approved replacement plan in place. The trap is so obvious that it is highly unlikely that the UK will walk into it.
The #1 difficulty right now is Merkel cannot come to the negotiating table because her domestic concerns overshadow everything else. No one thought that EU exit rules would ever be used, so they were not well thought out. Now, she is locked into “rules” that are unworkable and unconscionable resulting in a foreign policy that is perceived as irrational by other nations with potentially grave consequences to the German people. There is unlikely to be any relief from this danger until the a new government forms after Germany’s 2017 elections and domestic concerns can be put on a back burner.
But the UK continues to be required to follow EU law and pay into the EU budget. I don’t think this is quite what the Leave campaign had in mind. I would argue probably at least half of the Leave vote would probably just invoke article 50 right now if they had there way.
Second in terms of other nations I think France would be quite content with the UK only having plain vanilla WTO MFN status as would I suspect Belgium and Italy.
Thirdly tariffs and external goods trade policy are the exclusive competency of Juncker and the EU Commission. If Juncker wants to play hardball and force the UK into WTO MFN there is very little Merkel can do to stop it.
The UK strategy will be creative disobedience so as to frustrate the effectiveness of EU laws in the UK. The more EU rules the UK breaks while in the EU, the more Germany will be willing to concede to get them out of the EU. As long as the UK doesn’t file the “Article 50” paperwork they demonstrate German weakness by flouting huge swathes of EU law and getting away with it.
I will also add that from a strict legal standpoint the UK probably could negotiate Financial services passport agreement with individual countries like Germany bypassing the EU commission(Trade in Goods is an exclusive EU competency while services is still a “shared” competency). However, there are two problems with this strategy one is the UK needs to negotiate agreements with all 27 countries and second in this type of bilateral arrangement there could very well be countries such as France that won’t approve a bilateral banking passport under any circumstances.
I do not believe that the replacement deal requires unanimous consent from all 27 EU countries. The UK could certainly begin negotiations to bind the entire EU with countries that are more likely to be reasonable such as Ireland, Cyprus, and Greece. Junker would once again prove his irrelevance by protesting, but there is little to nothing he can do.
Ireland is going to have to be at the table, because there will need to be a somewhat different plan for the Ireland/North Ireland border. Having strict passport control to move back and forth would bottleneck truck traffic that both sides depend on. Most likely, Northern Ireland will be a special zone with “Activity Controls” requiring proof of UK citizenship to work permits or access public services. However, there would not be a physical border stop to prevent Irish trucks from delivering to NI businesses and vice versa. Passport “Physical Control” would take place as part of sea or air transit between NI and the rest of the UK.
Ireland in many ways has the most to gain. The lion’s share of any UK Financial Industry jobs forced into the EU are most likely to be in Dublin and the surrounding area as:
— Many UK banks already have back offices in Ireland
— Conveniently accessible for UK-Ireland travel (e.g. fast ferries)
— No jobs will be permitted to go to Frankfurt to appease Germany
UK claims to international law are matched by US claims and both reek of horse shit the moment you have a breath of fresh air with which to compare.
The lawlessness of western elites since the US judicial coup of 2000 has become directly proportionate to the political and/or economic power of the particular actor engaging in it. The very idea of some obligation to something larger has been completely abandoned until that moment when consequences from some larger thing, blowing back from acts of naked self interest, can directly damage the initiating naked self interest.
Inertia suggest that after months (or days) of strum and drang, when some other crisis erupts (like GFC 2.0italy) the elites will block Brexit out of their opportunistic minds and pretend this whole episode never happened.
Osborne has a little-known but increasingly pervasive form of Turrets that impels him to blurt out “Corporate Tax Cuts” and “Cut NHS” with just about any trigger, so it should be no surprise that this was his response to the ongoing Brexit drama– I assume he would have said the same had the vote gone the other way as well.
The fact that now his justification for his outbursts is to blackmail the EU (who know a thing or two about blackmail mind you) is immaterial. This strikes me as more for domestic consumption than any sort of bargaining strategy. I mean we knew from the get go that the Tories are diligent students of the Rahm Rule of never letting a crisis go to waste, so we should expect plenty more of these fits.
“Fools Gold of Corporate Tax Cuts”
Spot on. See Kansas’ economy since it enacted corporate tax cuts.
From InternationalMan:
Under a US umbrella, it is entirely possible that the UK could indeed become an offshore haven.
Yeah, well. Just look what happened to Saruman. The hyperpower behind the all-seeing eye doesn’t need a sidekick.
I’m not suggesting this as a way forward, just that this could be a possible outcome of the “And you won’t like it” statement. The City and New York are already joined at the hip. The two would only need to flip a switch to carry out this threat. Financial/economic warfare carried to a new level.
And to compound matters, Cameron has appointed a serial clusterfucker and possible racist as the man in charge of the transition.
No one’s ever successfully answered the question of why the elite in the Tory party split over staying in the common market – not to my satisfaction, anyway. I know they don’t really care about immigration that seriously or the pressures on the working families of Britain (at least not for their own austerity policies). That was red meat for the rubes. Tories have a natural impulse for depressing wages via austerity and open border policies. In many ways the Tories were campaigning against their very own policies by substituting the E.U. as a scapegoat.
But something under the surface was animating them – something they kept hidden from view. I suspected it might be opposition to reforms in banking. Once I saw Nigel Farage pimping for off-shore money-laundering locales I thought it might have something to do with E.U. investigations into Apple and Google’s Ireland-centered tax avoidance schemes. Boris Johnson jumping on the bandwagon also made sense given the importance of London as an international haven for money-laundering through its property market. Maybe something was coming down the pike that would have upset all of that.
Of course, the Germans engage in all of this anyway. Are the thieves falling out?
It explains the regional split – why the Scots would so badly oppose the interests of London – and it brilliantly and cynically manipulated the same hatred of Northumberland and Wales against London as well by actually conflating London policies with those of the E.U. and projecting that resentment onto the continent.
Of course, achieving actual power and destroying their rivals is always the worst of all possible worlds for conservatives. Their policies are unimpeded, out in the open and with a monopoly on power and clear political field, ultimately they have no one left to blame. If Northern Ireland and Scotland leave Britain, I think the Tories will one day come to deeply regret it.
The murder of British Army soldier, Fusilier Lee Rigby, in 2013 is vital to understanding why the Tories hardened on immigration. Foreigners used machetes to hack him to death on the streets of London.
If Germany/EU had been rational on National Security and the movement of people we wouldn’t be talking about Brexit today. Germany chose this outcome, deliberately or unintentionally, by demanding that the UK increase the number of potential murderers entering the country.
Both the killers of Lee Rigby were British.
You are correct. There are so many attacks, it is hard to keep them all separate.
The attackers Adebolajo and Adebowale are British of Nigerian descent … converted to Islam.
Oh, if it were only true that the oxymoronic “financial industry” in the City of London was creating real wealth with schemes and cons to make their casino more attractive to the players.
Prediction: After this mess gets sorted out and the European economy begins to work normally (which may take a long time and a fundamental change in central bank practices), it will likely be Germany with its real high-tech industrial base that leads the way, with tumbleweeds blowing across Picadilly.
What will matter in the end is where it happens and who has a job, not where and who is screwing around most creatively with the poker chips.
Kudos NC! You are teaching this Brit more on our current predicament than I’m getting from any domestc sources. The most interesting source of fact and opinion on the real Brexit issues I have found on the net – thanks
Britain had this problem in India pre-independence. The East India Company seized most of the country and exercised a tight control but there was one or two isolated bases of the Dutch and Danes on the Ganges and the French at Pondicherry and these were tolerated as EIC officials went there to send their “undisclosed income” back to Europe.
Is UK to provide the same service to the EU?. We know from Farage’s persuasive evidence that bribery is the oil the maintains EU institutions. Is Britain to seize the lion’s share of that? What will Luxembourg and Switzerland say?
The British outside the EU will not be able to preserve their tax havens because they would not be able to withstand joint US-EU pressure any more than Switzerland. Only states within a powerful block, like Ireland, Luxembourg or some US states can play that game with impunity.
And if you don’t believe the US would pressure its erstwhile mole in the EU, just look at what happened to Standard Chartered.