No Brexit bonfire for City of London, but it won't be a 'rule taker'

[snoop1130 12,665]

No Brexit bonfire for City of London, but it won't be a 'rule taker'

By Guy Faulconbridge and Huw Jones

 

FILE PHOTO: The sun rises behind the skyline of St Paul's Cathedral and the City of London, in London, Britain, August 2, 2020. REUTERS/John Sibley/File Photo

 

LONDON (Reuters) - London has no desire for a bonfire of regulations to retain its position as a top international finance centre after Brexit but it is ready to act if the European Union blocks access, the City of London's political leader said.

 

While it is still the only global centre to rival New York, London has seen some business and job losses since the shock 2016 Brexit vote and financial services were largely forgotten by British leaders during EU divorce negotiations, cutting the City off from its biggest single customer.

 

"It's disappointing to lose business but it's not at all catastrophic," Catherine McGuinness, who leads the ancient financial district's ruling body, the City of London Corporation, told Reuters.

 

The City, McGuinness said, neither wanted nor expected Prime Minister Boris Johnson's government to light "a bonfire of regulations". Still, a financial capital the size of London could not be a "rule taker", she said.

 

"We're not looking for a bonfire of regulation, we're not looking for a move away from international standards - absolutely not," McGuinness said. "We're not expecting any major deregulation at all."

 

Asked if it was worth Britain seeking so-called equivalence, essentially agreeing to stay aligned with EU financial rules in return for market access, McGuinness said: "I would hope that equivalence decisions could be made because they ought to be pragmatic and we are completely aligned in terms of rules."

 

It would be irrational of the EU to refuse, she said.

 

"Its clear that we can't be rule takers - we must be rule makers. We need to look at what our strengths are and what we need to do to build on them effectively - and hopefully that's against the framework of international regulations that we will help to shape."

 

The EU says it wants to examine planned UK divergence from EU rules before deciding on any UK access.

 

FISH BEAT FINANCE

 

London's Brexit job losses so far to the EU were around 7,500, McGuinness said, still at the low end of the range predicted by investment consultant Oliver Wyman which said in 2016 that the British capital could shed 65,000 to 75,000 jobs in a sector that employs a million people.

 

London dominates the world's $6.6 trillion-a-day foreign exchange market, it is the biggest centre for international banking and the second largest fintech hub in the world after the United States.

 

New York retained the top spot in a survey of global financial centres published in September by Global Financial Centres Index, with London strengthening its position in second.

 

While trading in euro shares and some derivatives has left for other European centres - with some to New York - after Brexit, no one European competitor has dominated and so London views New York, Shanghai, Tokyo, Hong Kong and Singapore as its true rivals.

 

Some elements of the bond, derivatives and capital markets had moved after Brexit, McGuinness said, though London retained by far the deepest capital markets in its time zone.

 

The finance sector pays more than 10% of Britain's tax bill, but McGuinness said in 2019 that British leaders were throwing it under a bus during Brexit negotiations by focusing on the goods trade and largely ignoring finance.

 

Britain's trade deal with the EU, clinched last month, does not cover financial market access.

 

"It was disappointing, it was very surprising. I've speculated it's because fish is more picturesque than finance, it may be that we don't tell our own story well enough or perhaps they felt the sector was big enough it make its own way," she said.

 

McGuinness said she hoped Johnson's government would now focus on the future of the City, helping green finance, fintech, Environmental, Social, and Corporate Governance (ESG) and new types of companies generate capital.

 

"I think we'll stay the FX capital of the world - that would be my prediction," McGuinness said when asked about the long-term future of the City. "We are very confident in London's basic strengths and that we will make up business elsewhere."

 

-- © Copyright Reuters 2021-01-27

 

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[Dagfinnur Traustason 1,438]

4 hours ago, snoop1130 said:

Its clear that we can't be rule takers

No problem! Don´t take the rules then, and see how good that works. Good Luck!

[Dagfinnur Traustason 1,438]

4 hours ago, snoop1130 said:

McGuinness said she hoped Johnson's government would now focus on the future of the City, helping green finance, fintech, Environmental, Social, and Corporate Governance (ESG) and new types of companies generate capital.

I am sorry to say, but I think he is a little bit busy with the pandemic.

[Hi from France 1,594]

I'm fine with the city doing whatever they please as long as we can take back control of our own markets and investment funds

[ukrules 21,567]

The UK should make things as easy as possible, deregulate, out compete, go our own way.

 

Become a digital trading hub for the world, issue a digital pound backed by the Bank of England and allow it to be used globally by anyone who wants to use it, merely by downloading an app and having someone send it to you.

 

That would kick start a new industry.

 

I've thought for a long time that the first country to issue some kind of proper central bank backed digital currency will be a major winner in the long run as new industries are built up around it.

 

Does it ever hurt to be first? Based on a long history of 'firsts' - I think not.

Edited January 27 by ukrules

[sammieuk1 20,713]

Back on earth universal credit pays £409pm that incudes £80pm uplift in the crisis and ends on March 31st a real snivelling derivative to trade in 

[roquefort 590]

10 hours ago, sammieuk1 said:

Back on earth universal credit pays £409pm that incudes £80pm uplift in the crisis and ends on March 31st a real snivelling derivative to trade in 

"The finance sector pays more than 10% of Britain's tax bill"

Where do you think that £409pm comes from, the Magic Money Tree?

 

[Loiner 9,899]

13 hours ago, Dagfinnur Traustason said:

No problem! Don´t take the rules then, and see how good that works. Good Luck!

Thanks. As with the rest of Brexit, it will work out much better for the U.K. than any of the EU and Remainers hope for. 

[JonnyF 14,096]

14 hours ago, Dagfinnur Traustason said:

No problem! Don´t take the rules then, and see how good that works. Good Luck!

It will probably work out like opting out of the EU vaccination programme i.e. the UK going it alone and massively outperforming the EU to the point of it being a flat out embarrassment for the EU. 

 

There's a reason they don't want to compete with the UK and it doesn't take a genius to work out what that reason is.

[Dagfinnur Traustason 1,438]

47 minutes ago, Loiner said:

Thanks. As with the rest of Brexit, it will work out much better for the U.K. than any of the EU and Remainers hope for. 

I have chosen to not take your replies seriously. I see it as replies from a person who is so blinded by sher patriotism, that he can´t see the forest for all the trees.

[Dagfinnur Traustason 1,438]

32 minutes ago, JonnyF said:

It will probably work out like opting out of the EU vaccination programme i.e. the UK going it alone and massively outperforming the EU to the point of it being a flat out embarrassment for the EU. 

 

There's a reason they don't want to compete with the UK and it doesn't take a genius to work out what that reason is.

You live the dream. Thinking that EU is scared of UK and competition???? Really? What competition? Come back when you´ve lost the financial district too.

[Loiner 9,899]

29 minutes ago, Dagfinnur Traustason said:

I have chosen to not take your replies seriously. I see it as replies from a person who is so blinded by sher patriotism, that he can´t see the forest for all the trees.

You have chosen to take your own views far too seriously.

I’m a lumberjack and happy to chop down your trees, then you will be able to see the light. 

[Victornoir 1,267]

1 hour ago, Dagfinnur Traustason said:

You live the dream. Thinking that EU is scared of UK and competition???? Really? What competition? Come back when you´ve lost the financial district too.

 

You know, project fear, the easiest negotiation in history, they need us more etc ...
Let's agree that some will never learn.

[Hi from France 1,594]

6 hours ago, roquefort said:

"The finance sector pays more than 10% of Britain's tax bill"

Where do you think that £409pm comes from, the Magic Money Tree?

 

That's the real way in which things have changed : the UK is the hardest-hit country in Europe, if not the world.

 

The government debt, which used to be not so bad (midway between Germany and Italy) has risen so much all now that a low-tax strategy has become impossible.

 

Not to mention EU will simply not allow a "Singapore-on-Thames" with the seat of European societies un London.

 

 

Ironically the tories are now on a way to be more interventionist in the economy than Labour. Classic  "free trade" and "low tax" conservative economics are done.

 

What do you think?

 

 

[soalbundy 20,206]

They wont even take rules from America......well not openly anyway. Even Farage has angrily said we are still tied to the EU apron strings,  just in nebulous way. Best to be pragmatic about these things, Australia is a sovereign country but is tied, financially at least, to China. No country is truly independent, not even the hermit state NK and it is foolish to think so but saying we are is soothing for the patriotic sheep. 

Edited January 28 by soalbundy