Graham Bishop's blog to 19th May 2011
City of London competitiveness: is it really in decline?
Three discussions/speeches on this topic this week! But these were in London and most speakers seem to start from a narrow assessment of what is happening in the UK – personal income tax at 50%, Vickers report on capital charges for UK banks, etc. Is this possible loss of self-confidence just a malaise that stems naturally from the sustained banker–bashing or is there something more to it? A straw poll after this morning’s speech suggested that a modest majority of the audience really did think London was slipping. But my argument remains strongly that the UK needs to ensure that it stays fully involved with EU decision-making as the EU is trying hard to export many elements of the single market in financial services to create a global level playing field.
However, there is a bit of traction to my view that the eurozone is changing its political shape, and this will have profound implications for London if the UK loses influence on the EU legislative process. That the situation is being debated should be seen as a major step forward for London!
Last week was a quick trip to Washington… what a different universe over there! “The crisis” is over and some even hope for the implementation of Dodd–Frank details to slip, partly because Congress is reluctant to fund the SEC adequately to fulfil the new functions imposed on it. Return to the EU and “the crisis” is everywhere – Portuguese bail–out, Greek default issues - financial reform MUST be done - and on time. But that rush is exactly what makes the City uneasy about how this will turn out for its role. More interesting speeches/discussions ahead!
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