capitaregistrars.com | 17
THE INTERVIEW
LORD MAYOR OF LONDON
WHAT NOW FOR THE CITY?
Registration Matters talks to the Lord Mayor of London, Alderman Nick Anstee, about London’s future, better regulation and bankers’ bonuses
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hat long-term impact do you think the recent banking crisis will have on London’s position as a global financial centre?
London is not the only centre to have gone through the financial tsunami that we’ve had over the past 18 months, and now that we’re coming out of that period it is worth looking at why London is a global financial centre. London’s greatest asset is its cluster – everyone deals with each other here. We also have history, the rule of law and political stability that gives people the absolute confidence that this is a place in which to do business – so it is a place that is founded on trust.
And that trust in London undoubtedly has an international reach. I’ve been in four of the Gulf States in the last month – UAE, Qatar, Bahrain and Saudi Arabia – and they all look to London as a financial centre. They have been somewhat taken aback by the scaremongering of media articles that have suggested that London is closed for business – but clearly it isn’t.
In terms of the importance of the financial services industry to the UK, we can see that it is an economy within an economy. It contributed 8.3 per cent of GDP in 2007 and the contribution it made to the Exchequer in fiscal year 2009 was 12.1 per cent or £61.4 billion.
There will be banking reform. I talk regularly to the leaders of the major international banks that are based here. There is recognition amongst them that capital and liquidity reforms are inevitable and they are going to work with the regulators to achieve that objective.
If we are looking at issues of liquidity and capital through the agenda of the G20 then that’s good news, because a level playing field will be retained – and that’s got to be in everyone’s interest. You might be cynical and say that because of the national interests involved
that you will never get to an international agreement. There’s certainly a question mark over whether it is possible – but it has to be worth giving it a go.
Whatever the outcome, banks will need to exist. The biggest threat to London and banking is subsidiarisation. If you have to start carving up your capital and leaving it in different jurisdictions, you take away the need for London. So that is one area that needs to be considered with great seriousness.
And you’ve got to look at what’s happening in the near term in the Far East – in Singapore, Hong Kong and Shanghai. The economies over there are huge and these are the sort of places that people may well start to look to in the future. But they haven’t got the history and they haven’t necessarily got the rule of law or the political stability that London can offer.
How do you think the role of the FSA – and regulation of the City more generally – will change in the future as a result of the crisis?
Well the FSA’s role must be one of being better at what they do. That’s not a slap in the face, that’s something that I think they would recognise. What we don’t want is to go overboard – we need to be proportionate, and separate practical issues from emotions.
You’ve got demands for greater lending, demands to recapitalise the balance sheet, demands to create a pool of counter-cyclical capital and demands for a tax on banks. There’s a whole host of initiatives that have to be looked at in a proportionate way and there are too many people standing on different galleries shouting. And therefore something like the G20 forum is undoubtedly a good start, but whether we actually get to an agreement remains to be seen.
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SPRING 2010
City of London
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