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Canada: partnering for prosperity

Tue, 08 May 2012 09:38:33 +0100

Last week marked another important milestone in the implementation of our International Financial Centres’ strategy as we signed a Memorandum of Understanding (MoU) with the Toronto Financial Services Alliance. This complements our agreements with Dubai and Moscow, and others are in the pipeline.

It is hard to overstate the importance and timeliness of the MoU to the UK's financial and professional services sector. Signed in the presence of the Lord Mayor of the City of London and the Hon. Michael H Wilson, Chairman of Barclays Capital Canada, it marks a fresh opportunity for business across the UK to work more closely with our Canadian counterparts.

The UK has strong historic links Canada. We are major trading partners and share ties beyond commerce and mercantilism, as many families know. Yet the UK has been guilty of neglecting many of those nations we have had the strongest of relationships with – to our social detriment and that of our economy.

The MoU is an opportunity to breathe new life into that long standing relationship and benefit in three ways:

Infrastructure
The UK has just published the National Infrastructure Plan which highlights the need for strategic, long term, investment if the aspirations contained in the Plan are to be realised. Investing in infrastructure not only creates jobs today, but also guarantees competitiveness tomorrow. Canadian pension funds are just the type of long term investors the UK needs to attract. We have done so with some success but far more can be done to build on it. The meetings I have had while here in Canada have shown me how we can make the UK a more welcoming place for those Canadian investors. I blogged about some of the findings and will be working on policy to put to government so we can fulfil our national goal.
Public Private Partnerships (PPP)
While the UK may have pioneered private sector investment in public sector development, the Canadians have brought fresh thinking to it. Unlike in the UK, the Canadian public, media and policymakers are supportive of the role of the private sector in helping to develop and deliver new infrastructure. There are lessons for the UK to learn. We must not lose sight of the fact that we have a global position in helping other countries develop their PPP models, but neither should we be too proud to learn from others.
Pride in the sector
However, perhaps the most telling difference between the UK and Canada is how positively financial services are viewed by Canadians. There is none of the 'banker bashing' rhetoric sometimes heard in the UK and politicians speak with pride about the role of the sector. Canadian institutions are held in new esteem in Canada and indeed around the world, and the Governor of the Central Bank has even been suggested as a potential candidate to run the Old Lady of Threadneedle Street. While it is easy to talk of Canadian banks always prizing 'dull banking' and it being part of the national psyche to eschew more racy financial services products, the message I heard repeatedly was that politicians realised that to grow their economy, and protect it from the global crisis, they need a strong financial services sector. True, new regulation was introduced and lessons are still being learnt, but the spirit is one of constructive engagement rather than vitriol. We have much to learn in the UK as the sector seeks to demonstrate its desire to be seen as part of the solution and part of our nation's growth story.

In addition to these points, new areas of cooperation were identified. A shared interest in Islamic finance stood out as a potential opportunity to develop new insights together. There is also an opportunity to learn and share good practice in global risk management, financial services technology, and pensions.

As I have often said on this blog before, the UK must remember its role as a great trading nation. That does not mean turning our backs on Europe, but it does mean renewing friendships with those nations we have had long and profitable relationships with. This will mean the UK not only remains relevant in these times of great shifts in economic power, but flourishes because of them.

PPP and infrastructure: five key lessons from Canada

Mon, 07 May 2012 15:28:09 +0100

I attended a meeting last week to discuss the lessons the UK can learn from the Canadian experience in infrastructure investment – a theme we had highlighted earlier in this year in our response to HM Treasury’s Call for Evidence on PFI reform. The Canadians have been setting the pace with their combination of bringing together public sector needs for infrastructure investment and private sector skills in capital raising, investing, project management, design and build.

Held at the leading law firm, Torys LLP, here in Toronto, the Lord Mayor of the City of London spoke about the UK's need to develop its infrastructure, and learn from the Canadian experience. While PPP began in the UK and we are recognised as having a global position, Canada has brought fresh innovation to the market and their structures have enjoyed the support of the public, media and policymakers.

The Honourable Bob Chiarelli, Minister for Infrastructure and Transport, gave his views on why Canada has been so successful in this area. He cited the establishment of Infrastructure Ontario as a defining moment as it enabled policy, budgets and implementation to be brought together. Antonio De Santiago, the CEO, of Infrastructure Ontario also spoke to a similar theme.

There are five key lessons that the UK could learn:

Clarity of purpose should be expressed through a single body where best in class expertise could reside.
Willingness to review what is happening in other parts of the world, to learn lessons and heed experience from other markets.
A focus on swift delivery. The public appreciates the sight of builders at work, swift completion and clear improvements to services. Many parts of the world have suffered because the planning and development stages are too long and too political.
Ensure a win-win for the private and public sector. Deals established in Canada have seen the introduction of completion bonuses or types of profit share arrangement where the public sector can benefit from extra gains being found.
More work analysing the needs of those looking for infrastructure investors and those who may want to invest. Not all investors have the same risk profile or expectations. While some are only interested in immediate opportunities others will consider greenfield plans. Some want to see capital growth, but most are more concerned with income – especially in the pension fund world. Greater analysis of investor profiles yields a better long-term project.

There are other lessons that require more detailed work to identify the UK benefit:

It is clear that the term ‘PPP’ is a damaged one. When Canada revitalised its infrastructure investment plans it wanted to be seen to be introducing a better system. The term ‘Alternative Financing and Procurement’ was used and it is seen to be more popular given the success of the projects delivered.
Canada has benefited from a deep bond market and investment managers have managed to develop specific products that are of interest to different types of investors around the infrastructure market. This has opened the market to different types of investors and grown the amount available for infrastructure investment.
There is a growing link between infrastructure investment and the availability of natural resources. As governments look to exploit their mineral wealth, infrastructure is needed. These new markets all open possibilities for those with experience. However, the existing markets still offer huge growth potential.

The UK need for infrastructure investment is by no means unique. Canadian pension funds offer a ready source of potential investors as the need to match long term liabilities with high quality assets makes infrastructure a relatively safe bet. However, a more sophisticated approach is needed if we are to that attract the level of funding that is available.

Most of all, investors are looking for political certainty and a welcoming attitude. While it is undeniably true that mistakes were made in early PPPs, our nation will have missed out if we scare away those who could finance other UK's much need infrastructure boost, with the jobs it would create today and the competitive advantage it would give us for tomorrow.

Flying the flag for investment in the UK

Mon, 30 Apr 2012 14:23:00 +0100

As part of its plan to tackle some of the biggest issues of the day – and they don’t come much bigger than the deficit reduction programme – the UK government has been clear in stating its dedication to supporting international business, championing UK business overseas and attracting investors to this country. Against a backdrop of slow economic growth across the EU, the need for Britain to be ‘open for business’ is plain for all to see, but it is also important that this is set in the context of creating jobs and growth for the nation.

TheCityUK is flying the flag to motivate organisations to come to the UK. This week, I am in Toronto with the Lord Mayor of The City of London to sign a Memorandum of Understanding on co-operation with the Toronto Financial Services Association.

The real opportunity is to reassure Canadian pension funds (which like to invest in infrastructure due to its long term and certain income stream) that the UK is a great place for investment. It is regrettable that the (necessary) HM Treasury review of PFI in the UK has been used against us, with other competitor nations are using it as 'proof' that the UK is about to exit this market. TheCityUK has put forward a response to the review, and while lessons have had to be learnt, the UK’s expertise in this area is considerable – as is the infrastructure investment it unleashes. We call on the government to reassure long term investors that the UK is serious about partnerships in infrastructure investment.

The UK’s opportunities lie not only in long established strengths, but also in newer ones such as Islamic finance. The UK is already the leading Western centre for Islamic finance, which also has a crucial role to play in infrastructure development. Its success can now be seen in the London Skyline, with Shariah-compliant finance utilised for the construction of the Shard. It is notable that leading French financial services conferences are now devoting more and more time to Islamic finance – it really is our game to lose.

I am addressing the Foreign & Commonwealth Office Leadership Conference tonight. My message will be a frank and simple one: the UK must look beyond the EU if it is to generate economic success for the nation. The FCO is one of the best – if not the best – diplomatic service in the world and we support the new focus on 'commercial diplomacy', but more must be done. We must keep the UK relevant in growing 'south to south' trade – to be the mid-point in the new emerging 'trade corridors'. That will be achieved by having the right policies but also by the right promotion of the UK as a place to get business done. And that means a positive global message from Government – which the sector would rush to support.

Discussing financial regulatory reform in New York and Washington

Fri, 27 Apr 2012 14:38:40 +0100

I have recently returned from a visit to New York and Washington DC, which was part of a regular series of visits I make to the US to discuss regulatory and competitiveness issues affecting transatlantic financial markets with industry leaders and senior policymakers.

Financial regulatory reform dominated the discussions I had with firms, policymakers, regulators and think tanks and in particular, the Volcker rule, which has been a major concern since it was proposed last year. I heard that interim guidance to clarify the uncertainty around its statutory deadline for implementation of July this year was expected and we have since seen the welcome official statement that entities will have until 2014 to conform. It remains to be seen now whether the regulators will re-propose the rule, which given the thousands of comment letters they received from across the globe, could take many more months. Therefore, until this happens, the rule will remain a major concern for both financial institutions and corporates because of its broad application and definition of a US person as well as its impact on liquidity.

I received some reassurance that there may be further EU-US alignment on derivatives rules now that EMIR (the European Market Infrastructure Regulation) has been adopted in the EU and the rules are close to those in the US. I have also been pleased to hear how much work has been done on FATCA (the Foreign Account Tax Compliance Act) between the US and Europe. I hope that the reciprocal agreements and proposed regulations will lead to a workable solution for European financial institutions with consistent data requirements and reporting frameworks.

I heard concerns that there will be inconsistencies between the US proposal on Basel III, which is expected in the coming months, and the EU's CRD (Capital Requirements Directive) VI with the watering down of quality of capital required being a particular issue raised. There is also growing awareness, as in the EU, that more business in the US is being pushed into the so-called shadow banking/unregulated sector due to financial regulatory reform, but action looks likely to be only taken where the consequences could have systemic importance.

Finally, a recurring topic of conversation during my visit was the cumulative impact of aspects of financial regulatory reform on liquidity, both in the US and EU, which is affecting access to finance for corporates and their supply chains in particular. The effect of this on the wider economy is something that needs to be seriously considered by policymakers, legislator and regulators both sides of the Atlantic, particularly before proposing even further regulation.

London as an offshore renminbi trading centre

Wed, 18 Apr 2012 15:12:32 +0100

Chancellor George Osborne has today joined with leading City institutions as part of the push to develop the City of London as the West's offshore trading centre for the renminbi (RMB). The initiative coincided with the announcement by HSBC of the launch of the first yuan bond outside China and Hong Kong. Both initiatives are a clear sign that London intends to co-operate and compete in the rapidly growing international remninbi business.

The City of London Corporation’s work to further develop London as an offshore remninbi centre has provided a comprehensive platform to launch this initiative. I commend their policy paper London: a centre for remninbi business released today which quantifies the significant RMB business already being done in London.

London is by far the largest foreign exchange market in the world, accounting for 37% of trading, and is therefore ideally placed to join Hong Kong as a major international offshore centre for the trading of China’s currency. The breadth of financial and professional services based in the UK supports this ambition and means that the expertise is already here to develop the market. Added to that are ‘natural’ advantages of our time zone – which means that our daily trading naturally follows on from that of the Asian markets – and English being the universal business language.

Why China?

China’s GDP is £5,824bn, having grown at 11% a year, on average, over the past five years. The IMF predicts that China will contribute more than one-third of global growth by 2015. The importance of mainland China to the global economic and financial system will increase accordingly. Thus, China’s economic growth and the internationalisation of the RMB offer real opportunities for London’s financial and related professional services.

Settlement in RMB is growing and the currency will gradually internationalise, although it is hard to be sure when it will become fully convertible, its transition to a global reserve currency is already predicted. The Chinese authorities enforce strict controls on the RMB. However, as China’s economy expands, it is expected that restrictions on the RMB’s flows and value will continue to be gradually relaxed. This will benefit London as trading will increasingly flow to the UK capital.

The Hong Kong Monetary Authority (HKMA) plans to extend the hours of the RMB payment system in June to give European-based trading firms more time to settle offshore RMB payment through Hong Kong. The move will keep the system open until 17:30 UK time, giving London another trading advantage.

In 2011, the Chinese authorities announced their support for the UK as the first offshore RMB trading hub in the Western time zone. In January, following talks between George Osborne and Chief Executive of the HKMA, the launch of a joint private sector forum was announced. This forum, comprising major UK banks and the Bank of China, will enhance co-operation between the UK and Hong Kong. At its first meeting in May it will focus in settlement systems, market liquidity and the development of new RMB-denominated products and services in London.

This initiative will generate jobs and growth across the nation and in all sizes of organisation, and ensures that the UK remains competitive and open for business with Asia. It is a positive and welcome move and as the UK market grows it will provide a boost to the UK economy, helping firms in all sectors take advantage of the opportunities created in the Chinese market.

PPP: supporting the home team

Mon, 16 Apr 2012 16:41:30 +0100

Why were Public Private Partnerships (PPP) introduced in Britain? A recent blog post in The Guardian covers some motivations (value for money, being able to build assets now that would not have been possible with budget limitations), but it misses some of the most obvious.

The words ‘built on time’ and ‘on budget’ and ‘will be maintained for twenty five years’ are not ones associated with traditional public sector procurement. The innovations associated with PPP include competitive tendering, whole-life costing for projects and the incentive for the private sector to keep the infrastructure maintained in a good enough condition so as not to be penalised when the assets are finally handed over at the end of the project life. Even the National Audit Office confirmed* that the traditional procurement systems could benefit from lessons learnt from our PFI programme.

The UK had a massive stock of dilapidated social infrastructure by the time we reached the 1990s. This was the product of a system, largely still in place today, giving politicians kudos for ‘ribbon cutting’ and no incentive to maintain the facilities they had built. When was the last time an MP turned out to give the hospital maintenance team a pat on the back? And would the media deem this a ‘story’ worth covering? Of course not.

So one man’s PPP ‘overhang of debt’ is another man’s ‘long-term maintenance budget’. Crucially, there is no similar provision on the balance sheets for the public sector to pay for the maintenance of its own infrastructure projects. Indeed, in some cases the public sector does not actually know what assets it owns in the first place, let alone what condition they are in. PPP provided one way out of this problem, and this should not be forgotten.

Finally, the article laments, “following in the steps of football and cricket, PPP wouldn't be the first time the UK has pioneered something, only to see it perfected overseas”. On the contrary, it is UK practitioners – individuals and firms – who are in-demand abroad. We have the star players. With 20 years of PFI and PPP experience, mostly good but sometimes bad, the UK has unrivalled expertise across a wider range of public services. This is a great British asset and it has been used in every major emerging market in the world. So as the government exhorts the private sector for an export-led growth agenda, UK expertise in putting together PPPs is at a premium. Our members in TheCityUK are out there playing the game at the top level. It would help if we had less jeering from the stands.

*In April 2011 the National Audit Office concluded that: “lessons from the large body of experience of using PFI can be applied to improve other forms of procurement and help Government achieve its aim of securing annual infrastructure delivery cost savings of £2 billion to £3 billion.”.

To find out more about out work promoting the UK's expertise in PPP overseas, please contact us.

Building the global networks of future prosperity

Fri, 30 Mar 2012 14:52:55 +0100

Last night I attended the Lord Mayor’s Easter Banquet at Mansion House. The Foreign Secretary William Hague spoke about how UK foreign policy is expanding our ties beyond Europe and North America, how this supports the UK’s economic success in world affairs – and its importance in providing the jobs and growth that the country so dearly needs. He paid tribute to the City of London, as the world’s “greatest centre of finance, and for British business as a whole."

The Foreign Secretary is right to highlight the contribution made by the sector – the role of international financial services is particularly prominent. The UK trade surplus totalled £35.7bn in financial services and £7.4bn in professional services in 2010, exceeding that of all other sectors. These trade surpluses help to offset large trade deficits in goods of £99bn and travel of £11bn. Last year, British exports of goods were up by £50bn, including significant increases to China, Brazil, Russia, India and South Africa – and financial and professional services are central to that growth.

It’s understandable that UK businesses have valuable established trading relationships with developed markets, given the perceptions of ease of doing business in them. Emerging markets, on the other hand, are for some businesses – SMEs in particular – still a mountain to climb. Yet they represent the most exciting prospect of a profitable future. This is as true of financial and professional services as of other sectors. Our long-term economic recovery depends on UK businesses penetrating new markets and removing barriers to them accessing a global customer base.

At TheCityUK, we seek to forge these new partnerships beyond our traditional trade ‘allies’ – with growth markets in the Gulf, Turkey, Brazil, Russia, in Asia and Africa. We are actively assisting the growth of financial centres in Moscow and Dubai as we look to benefit from the expansion of the global market. In addition, we are working to promote key sectors of excellence in the UK: Dispute Resolution services such as litigation, mediation and arbitration; Public Private Partnerships and Islamic finance.

Of course, the EU remains a crucial partner for us as we strive to open up markets to our exporters with new free trade deals. Our joint work with the City of London Corporation on the International Regulatory Strategy Group provides a platform for the co-ordination of engagement with EU member states, and our well established Liberalisation of Trade in Services Committee continues to submit views on major EU initiatives focused on trade and growth.

As the Foreign Secretary concluded in his speech last night: “It is the networked world in which our global reach and engagement is vital and must not only be maintained but deliberately and determinedly advanced."

It’s no time to raid the pensions piggy bank

Tue, 13 Mar 2012 09:30:57 +0000

This weekend I co-signed a letter to the Chancellor regarding the industry’s concern over the announcement of possible restriction of pensions tax relief in this year’s Budget on 21 March 2012.

As our latest Pension Markets report shows, it could be argued that pension legislation of recent years has had the overall aim of seeking to put the financing of pension provision on a sustainable basis over the long term and ensuring appropriate pension provision for each individual. Long term structural reforms in the state pension system and qualifying age are being implemented, along with reform of workplace pensions provision with the establishment of NEST, including auto enrolment with minimum employer contributions. While, at times, that policy aim has seemed to drift off course and operational difficulties have been caught up with political expediency, there is a good story to be told about the future. However, further changes will add to an already complex regime, while appearing at odds with the Government’s general policy direction in this area and its broad narrative encouraging people to save across all income streams – and take more responsibility for themselves in retirement.

Indeed, the substantial individual contributions to pensions made by higher rate tax payers would be put at risk by restriction of pensions tax relief, damaging the UK industry (which is the second largest pension market in the world after the US) and its ability to serve today's pensioners – as well as tomorrow's.

While estimates have suggested that £7bn a year would be saved by scrapping higher rate tax relief on pensions altogether, the Government already restricted the amount that can be paid into a pension only one year ago – measures that were adopted with the aim of saving £4bn a year. Not only would it appear rash not to give the original proposals more than a single year to take effect, but it would give the impression that the Government is willing to treat retirement savings as a convenient piggy bank into which it is happy to dip whenever cash runs short, seriously undermining investor confidence.

Now is not the time to raid pensions – it is time for the Government to deliver on its promise of an export-led economic recovery and the delivery of a competitive tax system as the basis of economic growth. Our Budget Representation calls for the Government to enhance the international competitiveness of financial and related professional services, thereby contributing to UK growth, tax receipts, balance-of-payments and employment.

Liberal Democrat Spring Conference: balancing growth and stability

Sat, 10 Mar 2012 18:26:45 +0000

This morning TheCityUK sponsored a CentreForum meeting at the Liberal Democrat Spring Conference in Gateshead. Danny Alexander was our guest speaker before holding his Q&A session in the main hall. He spoke about the need for the financial services sector and the role we have in creating jobs across the country. While setting out the requirement to update the regulatory architecture, I was personally pleased about his tone and the obvious recognition of the value our sector has both as a national employer and as a key component in the export-led recovery.

We were also joined at the event by Sharon Bowles MEP. Sharon has been a forthright and influential MEP, seeking improvement in regulatory systems but not wanting to inflict unintentional consequences along the way. Her decision to step down at the next election will mean a loss to the Parliament's deliberations.

My own speech focused on the need for the UK and the EU to remain a competitive place to do business. Financial services are a major export earner for our country – contributing getting-on for £40bn in trade surplus – the most of any sector. That export strength benefits the whole of the UK and is reflected in jobs being created around the country. In the North East over 50,000 people are employed by the sector and there is much good news, including Santander's decision to invest more in the region by opening up new, larger, premises.

While no-one in Newcastle needs reminding that mistakes were made by regulators and by some banks, lessons are being learnt and the financial services sector is working with politicians and regulators to make the system safer and more stable. This, as Sharon pointed out, can't be at the expense of economic growth which is needed now more than ever.

In the questions that followed the formal presentations, we touched on how new investment could be brought into the UK. One solution that TheCityUK is exploring is the role of a Sovereign Sukok, and interestingly a leading member of the Muslim business community who was also present spoke in favour of that proposal. This is just the type of example where modern, forward-thinking financial services approaches, based on traditional strengths, can unlock much needed investment into our country for the benefit of all.

I personally enjoyed being back in Newcastle, where I was at University. The warmth of the local people and the natural hospitality marks out the region as being an ideal investment destination, given the quality of life, countryside, sports heritage – and of course outstanding universities!

Update on review of DC pension provision

Fri, 09 Mar 2012 12:46:25 +0000

Since my last update, TheCityUK’s pension review has gathered momentum with input from a wide range of organisations and market participants. We are very conscious that the success of the pension changes will be measured by the participation rates and the consumers’ attitude and willingness to engage.

Behavioural Science shows us that consumers generally dislike making decisions. They may want choice, but they also want easy solutions to be given to them. Automatic enrolment into a pension is the policy response to this dilemma: whilst individuals will have the choice to ‘opt out’, their natural inertia makes them unlikely to do so.

For the nation as a whole, auto-enrolment is a good thing, but we still need everyone to take more responsibility for their future retirement income – and ideally this will mean investing more than the minimum of 8% of band earnings.

Whilst for most employees the choice of pension scheme will have been made for them by their employer, we still felt that as part of our review we needed to hear from consumers and understand what they wanted. For this reason, we recently held a breakfast meeting to discuss consumers’ attitudes, priorities and needs, and we invited the main consumer champions along to share their thoughts with us. In addition to Which?, AgeUK and the FSA’s Consumer Panel, we were pleased that Lord McFall and Professor David Blake were in attendence, together with a number of trade bodies and the Personal Finance Society, whose adviser members will probably have to explain the pension changes to pension scheme members. This meeting gave us fresh insight, and will help to drive the rest of our work.

The next stage of the review process is a conference on 19 April, which will be opened by pensions Minister, Steve Webb MP. We will produce a short paper on our findings following the conference. In the meantime, you might like to read our recent pensions report.

The City: a driver of growth at home and abroad

Thu, 08 Mar 2012 16:11:24 +0000

Last night, I addressed the Trade and Industry Dinner at Mansion House, attended by City leaders, Secretary of State for Business, Vince Cable MP, and Minister of State for Trade and Investment, Lord Green.

I applauded the Secretary of State for his focus on protecting and promoting our manufacturing sector, especially in communities in need of jobs, and for his focus on diversifying sources of lending. We in the City Corporation are contributing to his work, and are in agreement that the goal must be to create sustainable jobs and growth. Growth will only be possible if we diversify our economy, and the City is essential in providing the capital needed to drive this.

The City is a unique selling point for “UK plc”, attracting international business and investment that locates not only in London but throughout the country. It fuels an industry that provides over two million jobs across the UK, and represents a gold standard to our competitors and partners, helping other financial centres such as Moscow and Dubai to establish themselves.

While the City is an international financial centre, it is also the UK’s financial centre, supporting and serving British businesses and many millions of people here in the UK. I spoke of my experiences of meeting business people throughout the UK. In Bradford, Manchester, Liverpool, the Isle of Man, Belfast and Cardiff, I have heard how local businesses are dependent on the City of London’s success, with new jobs being created across the UK because of success in London, and that success feeding back to London.

I also spoke of my concerns about fiscal and regulatory uncertainty holding back growth, and about how focus on the lending shortfall might be damaging our economic prospects. While the City shares the Secretary of State’s focus on lending to our crucial SME sector, I noted that comment on the shortfall of just over £1 billion obscured the fact that £75 billion had been lent. My point was that the debate about lending must be part of a wider debate on our shared goal of driving forward our economy.

My recent visits to Turkey, the Gulf and Saudi Arabia have shown me that the UK has huge international support. There are fantastic opportunities for UK firms in all sectors, but to take them we need to build private sector confidence and sell the UK as a package, from financial services to infrastructure, working together to exploit the excellent promotional work being done by the Government.

I want British business to present a cohesive and a coherent front, wherever it is and whatever it does. I also want to use the City and Mansion House to highlight the partnerships between the City and the nation. This is why I have encouraged businesses from across the UK to showcase their products at Mansion House during the Olympic period so that they might reach an international audience. As I made clear last night, I want us all to work together to build success in our export markets and create jobs and growth at home.

Dydd Gŵyl Dewi Hapus – Happy St David's Day

Thu, 01 Mar 2012 08:35:15 +0000

Today is St David's Day and I'll be attending a gathering of leading Welsh figures in Parliament to mark the occasion. While the day always provides an opportunity to remember what is best about Wales and its traditions, we should never lose sight of the fact that these give us the foundations to look to the future with optimism.

On my last visit to Cardiff, I had the good fortune to spend time with the First Minister, Rt Hon Carwyn Jones AM and his Minister for Business, Enterprise, Technology and Science, Edwina Hart MBE OStJ AM, to discuss the future of the Welsh economy. The most positive aspect was their desire to see financial services continue to play a major leading role in creating the jobs and economic growth that Wales needs.

In Cardiff, financial and professional services employ 19,700 people and across the whole of Wales that number is 55,700. We have always added considerably to the Welsh economy and the Gross Value Add of the sector is £3.9 billion.

That understanding is central to the fact that financial services have been specifically identified as a Growth Zone for the economy. Cardiff's regeneration programme has the development of its financial district at its heart.

The Welsh financial services industry has much to be proud of, from firms with long histories such as Principality Building Society through to newer success stories such as Admiral, and a thriving sector of smaller and specialist firms. The legal and advisory services are also very strong, PwC, KPMG and so on being leading employers.

I was also impressed by the desire for universities to better support business - especially the trading floor that had been created by one university to give its students a practical insight.

These are difficult times for the UK economy and we need to build on our strengths. The depth of experience and desire to do business means that today's St David's Day is one during which we should be marking a new, positive, outlook for financial services in Wales.

Open for business

Wed, 29 Feb 2012 14:00:00 +0000

The Migration Advisory Committee has just issued a report setting out its view that the Home Office should not impose further barriers on the migration of skilled workers as it risks Britain not being seen as 'open for business'. I wholeheartedly agree.

Currently the cap on skilled workers sits at 20,700. Given the economic contribution made by skilled people wishing to come to the UK, this must not be cut - and there is a case for a potential increase which I'll come to later. The report also makes it clear that 'inter-company transfers' (ICT) should have no restrictions on them. According to MAC's figures, around 30,000 people came to the UK under the ICT scheme. The report called for those jobs with a salary level of £70,000 (or at PhD level) to be exempt from the resident labour market test.

While immigration has been an electoral issue and is one that policy makers must be mindful of, the migration of skilled workers must not become a political football given the economic contribution of those who choose to live and work in the UK and who pay their way.

The financial services sector is a case in point. Employing over a million people, with an additional 967,000 in related professional services, ours is a global industry. When we undertook an analysis of where the tax received by Treasury comes from, we found that over £20bn is paid by those firms that have chosen to base themselves in the UK - but are international and global players. Even those firms that could be regarded as having a UK ancestry recruit from around the world and wish to give opportunities to their employees regardless of where they were first employed. This means international exposure: training, career development, and exposure to the pre-eminent financial services centre in the world - London.

There are around 300 languages spoken in London and people from 120 nations work in the City. It is this global outlook that is a hallmark of the City - and adds to its attractiveness to those who are seeking to make foreign direct investment.

It has been said that we risk talented individuals leaving the UK or jobs here being lost because of the allure of Asia and people wishing to be “close to the action”. Indeed, there has been much comment on that issue in the weekend's press given particular regulatory proposals working their way through Brussels. The response to such measures must be for London to stay relevant - and "bring Asia here" and this is why we are so supportive of the Government's work to make London the RMB offshore centre.

As that initiative becomes successful, it will mean another influx of foreign nationals not just from China but from around the world. We must have an immigration system, and policy attitude, that welcomes this new development, eases its way, and maximises the jobs and growth it will create. This does not mean less regulation or more open boarders, it means smarter regulation and smart immigration policy. And it means that the cap on skilled and professional workers must have the ability to be 'flexed' as our economy recovers and employers wish to bring in highly talented people.

These matters not only affect China and India, though. I was in Dubai last week to sign a Memorandum of Understanding between ourselves and the Dubai International Financial Centre. This sets out a programme of work to better promote the area to those UK companies seeking to export to the region and seek foreign investment in the UK: so a 'win/win' for both - and commercial opportunities for UK based firms.

The message that Britain is 'open for business' is a central part of our 'pitch' to overseas markets. Looking at the slow economic growth we can expect across the EU, it is essential that we take advantage of the opportunities created in the rapidly emerging and newly emerged markets. The UK has always had a positive attitude to immigration for those who wanted to build a new and successful life here.We must hold dear to those values now as they will be the basis of our future economic success.

Creating UK jobs by helping exports to Dubai

Thu, 23 Feb 2012 12:09:52 +0000

There are 80,000 Brits who live in Dubai and I've added to their number over the last couple of days. I was in Dubai to sign a Memorandum of Understanding (MoU) with the Dubai International Financial Centre Authority (DIFC) to better promote the sector there, and identify inward investment opportunities in the UK.

It's a useful reminder to note that UK trade with this part of the world is greater than with China and India combined. Standing at £7bn, the Government plans to increase bilateral trade with UAE to £15bn by 2015.

The MoU commits us to share financial, legal and regulatory expertise, collaborating on areas of mutual interest including closer links on education, training and qualifications. The agreement is expected to provide a significant boost to UK exports in the Middle East and North Africa region.

I signed the MoU with Abdulla Al Awar, Chief Executive of the DIFC Authority, and it was witnessed by His Excellency Abdullah Mohammed Saleh, Governor of the Dubai International Financial Centre, and the Lord Mayor of the City of London Alderman David Wootton.

As the UK seeks to grow its economy out of the current economic difficulties, this will be best achieved by dealing with markets more rapidly growing than our own. While many UK firms are already in Dubai and working across the United Arab Emirates (UAE), others still haven't recognised the opportunity that exporting their services to the region can offer.

While the 'Dubai story' has had its share of negatives, the positives remain: a growth rate approaching 4%, a welcoming attitude towards 'brand UK' and great potential for UK experience in financial and professional services. The problems of a few years ago haven't simply melted away, they are being confronted and that has helped the region rebuild its reputation.

All of which means there are real opportunities for UK based firms in the region and we can help turn them into real business.

More information on the MoU and its practical steps will be available to members. Let us know how you would like to get involved.

Casablanca: an emerging financial centre

Tue, 21 Feb 2012 18:42:29 +0000

Woman: What makes saloonkeepers so snobbish?
Banker: Perhaps if you told him I ran the second largest banking house in Amsterdam.
Carl: Second largest? That wouldn't impress Rick. The leading banker in Amsterdam is now the pastry chef in our kitchen.
Banker: We have something to look forward to.
Casablanca, 1942

I’m currently the guest of the British Chamber of Commerce in Casablanca. If you have read my CV you will have seen that I used to be a British Diplomat. As a Diplomat, I never really had ambitions to be an Ambassador but one of the jobs I always wanted was to be Her Majesty’s Consul in Casablanca, based on the impressions formed by the famous film quoted above. I regret that I never got that job but I am delighted that I eventually got here, and that my good friend David Flint now has that position.

I am here to discuss what makes a city successful as a financial centre. As part of our international strategy, TheCityUK seeks to increase the UK’s links with fast-growing world markets, particularly those with ambitions to become global financial centres in their own right.

Last September, I visited the Kremlin to sign in front of the British Prime Minister and the Russian President a Memorandum of Understanding with our Russian partners to develop Moscow as an international financial centre. Although TheCityUK is not a government body, the Russians announced the agreement as the first bilateral agreement signed between Russia and the UK in over six years. This illustrates the importance Russia attaches to developing Moscow as an international financial centre. Political support is essential. Since Moscow, we have been approached by Dubai and Toronto to sign similar agreements.

That is why I am pleased to be here today to develop relations between the UK and Morocco. I hope that one day we will sign a similar agreement with Casablanca.

I am often asked why we are assisting potential rival centres to grow. My response is that this should not be seen as a ‘zero-sum game’ in which emerging financial centres gain at the UK’s expense. On the contrary, as with all trade, there will be advantages for both sides as the global market expands.
How can Casablanca learn from London, and perhaps more importantly, other new centres?

In Lloyd’s, London has the largest insurance and reinsurance market. Lloyd’s has been trading continuously since 1688 – nearly for 325 years; our stock exchange was established in 1565. So I could say history helps. But that does not explain the success of Dubai, Bahrain or Shanghai which have developed as major players in the last 30 years or less.

For the new financial centres I think they have in the first instance to develop a unique selling point. This could be geographical location or an expertise – say insurance or Islamic finance. There are four basic requirements:

a vision and a will to succeed. This has to be set and supported by government which will sometimes have to make decisions that are not popular. Someone has to drive the vision to encourage the market to grow;
a business and social culture that encourages foreign investment;
an educated workforce, and
an infrastructure that supports a growing industry.

The physical infrastructure is the perhaps the easiest. Casablanca has the right buildings, transport infrastructure, housing and so on. There is also a requirement for the related and supporting industries: the right cluster of ancillary skills and services, plus access to competitive services in fields such as IT and telecommunications.

So there is a wider task in creating a financial centre that also brings beneficial job creation in supporting industries, especially as you have to keep adapting and improving the physical environment.

For example, for 400 years London’s financial centre was traditionally ‘the square mile’ right in the heart of London. But over 30 years ago it was realised that there was simply not enough space, so a complimentary new development was built at Canary Wharf – a new financial centre has sprung up, physically similar to the Dubai International Financial Centre (DIFC). Interestingly for both Canary Wharf and the DIFC, new legislation and laws had to be enacted to allow them to be established.

This is where government backing is crucial – but not just in giving support for the construction of infrastructure. Government cannot create commercial advantage on its own, it has a key role to play in economic and prudential regulation – reliable rules for the soundness of providers that need to be (and be seen to be) independent of the executive. Transparency, maintenance of law and order, and a strong law of contract with an independent judiciary are also key factors.

Foreign investment and business flow like water – they flow to where there is the least resistance. Any foreign bank can set up in the UK provided it meets the regulatory requirements, so can any law firm or accountancy practice. Our government decided many years ago that the UK should be open for business. Companies must have freedom to compete effectively and innovatively, with a supervisory system that strikes the right balance between stability and allowing scope for innovation.

Sadly, many countries still put up trade barriers and have protectionist measure in place. To encourage growth in financial services the government has to ensure that there are no obstacles to trade. They may have to make decisions that are unpopular in the short term with parts of their domestic industry.

Multilateral trade agreements can remove these barriers. It is interesting to compare the EU/Korea and EU/India Free Trade Agreements (FTAs). Both sets of talks started at the same time. The EU/India FTA is bogged down. But the EU/Korea FTA has been finalised and foreign investment and business are already moving to South Korea.

One problem area in the India discussions is that it is difficult for international law firms to work there. Complicated international trade needs good lawyers, and it follows that an international financial centre needs good, internationally experienced lawyers. Our research has shown that not one local lawyer has lost their job because of the opening of markets to international law firms; indeed job opportunities have grown as international companies locate in these new markets.
The availability of skilled staff is a key factor in location decisions. This is particularly the case for emerging centres, the locations where businesses are most likely to be considering opening new offices or expanding operations. A survey conducted by Ipsos Mori with the City of London, found that the availability of local talent acts is a key factor for businesses when deciding which staff and operations can and cannot be moved. Decision-makers pointed out that if a depth of local talent in the form of trainees and support staff is available in a particular location, moving key operations to that location becomes both more cost-effective and easier to do.

In light of these considerations, there is a distinct trend towards emerging centres actively seeking to enhance the depth of local talent. This is not just a function of government efforts to improve education locally, but also a consequence of businesses themselves realising the advantages of training local staff. Many decision-makers argue that it is cheaper and more effective to have employees who understand local culture and local business.
I’ve already mentioned the requirement for new international and regional financial centres to have a unique selling point. I believe Morocco and Casablanca have many strengths:

First of all, the Moroccan government has pursued an economic programme accelerating real growth. Reforms of the financial sector have been implemented. Morocco is no longer reliant on phosphate exports, it is emerging as an exporter of manufactured goods, textiles, clothing and agricultural products. New service industries in telecommunications, tourism and offshoring have grown. So a strong local economy is developing.

Second, the proximity to and relationship with the EU. Under the Neighbourhood Action Plan, Morocco has already embarked on a major effort to align with the legislation and standards of the EU. Probably more so than any other aspiring financial centre. This ambition is reflected in Morocco's advanced status with the EU.

Thirdly, access to the Africa. Currently there is no major regional financial centre in North Africa. There is a role to be had in providing access to the immediate region and North West Africa, especially in the francophone markets.

As the balance of global competitiveness swings away from the older OECD economies, it will be vital to establish long-lasting partnerships. Partnering with new financial centres – as with any new business partner – is an important challenge for financial centres such as London.

I believe Morocco has many of the positive factors to make the Casablanca Financial Centre a success. With a bit of drive and support, Casablanca can grow into a regional then international financial centre.

Rick: “I think this is the beginning of a beautiful friendship”
Casablanca, 1942

Dreadnoughts and the Private Finance Initiative (PFI) Review

Mon, 13 Feb 2012 10:56:51 +0000

The British Grand Fleet at the Battle of Jutland was led by Admiral John Jellicoe. As the commander of the fleet of dreadnoughts sent to battle in the North Sea in 1916, Winston Churchill observed that Jellicoe was 'the only man on either side who could lose the war in an afternoon'.

Similarly, the long course of PFI in the UK will be set by the outcome the HM Treasury review – of which the deadline for evidence was last week.

The review is timely and necessary. Timely, because it makes sense for the UK to review its infrastructure procurement methods, to assess the public services that the private sector can be harnessed to deliver, and valuable to decide what has worked and what needs to change in the future. Necessary, because the public policy debate concerning PFI had reached levels of misunderstanding and acrimony that were starting to damage the UK sector abroad, as well as at home.

TheCityUK’s contribution to the review is a response document prepared after consulting our members, so thank you to everyone who has taken part. In the paper, we propose that the government cuts down the length, cost and complexity of the procurement process in the UK. We also discuss the role of a centralised agency staffed by procurement professionals to help concentrate and retain public sector procurement expertise. There will be examples from abroad – often built on the UK’s own experience and then revised to take into account of local needs.

I am sure many of you saw The Economist commenting how successful UK export firms were able to, “benefit from long experience of public-private partnerships, which were pioneered in Britain (and often have a poor reputation there) but have spread to other countries”. One of the most important determinants of success for PFI or its successor model in the UK will be how far we can foster a stable, supportive political environment. So reputation matters. The results of the review must promote confidence amongst practitioners, investors, consumers and the wider public.

The review, if completed correctly, will enable the UK to reap the twin rewards of inward investment and export opportunity. If not, the UK could lose out in the global competition for funds and see the stifling of a once successful, global growth-oriented sector.

While Jellicoe thundered during his battle, “There seems to be something wrong with our bloody ships today”, he was still successful. Indeed, his opponents in the Kaiser’s High Seas Fleet returned to their home ports for the rest of the war, making Jutland a strategic victory.

The PFI review submissions have now reached government. The direction and course will then be set by HM Treasury and those who sail in her. Full steam ahead.

Follow this link to read our response to the PFI Review in full.

The Next Generation: the view from Davos

Tue, 07 Feb 2012 14:53:03 +0000

The theme for this year's World Economic Forum (WEF) Annual Meeting, held at the end of January in the Davos, Switzerland, was 'The Great Transformation: Shaping New Models'. Over five days, the 2,600 delegates – top politicians, and senior leaders from business, finance, academia, media and civil society – were asked to "challenge long-held assumptions about society, politics, technology, business and economics" and come up with "New Models" (i.e. new solutions) to recurring global problems such as rejuvenating the global economy and restoring faith in capitalism. But it wasn't just senior leaders influencing the global agenda. Younger leaders too – from business and finance as well as other sectors – are becoming more integrated into the WEF's activities, and making an impact at Davos too. Established figures are realising that younger leaders can play a key role in changing the world and shaping the future. At this year's Davos, there was certainly a real emphasis on nurturing the next generation of global leaders in the same way that TheCityUK has started to nurture its Next Generation Vision (NGV) group and support global initiatives such as One Young World.

The WEF's well-established Forum of Young Global Leaders (YGLs) is a network of younger leaders under 40 from a spectrum of industries, much like TheCityUK's NGV group. One of the YGLs' most eye-catching projects is the Global Business Oath, where YGLs have partnered with the Thunderbird School of Management and others to encourage younger business leaders to "hold themselves to the higher standard of integrity and service to society that is the hallmark of a true professional" from the outset of their careers. This has obvious parallel's with the NGV's own call for positive values and behaviour to be the foundation of a career in financial and professionals services, for example by adhering to a moral code.

I was fortunate to attend a fantastic YGL event, 'The Purpose of Your Leadership', with a stellar panel consisting of David Rubenstein, founder of private equity firm The Carlyle Group; Howard Cox, a Partner at Greylock; Bill George, a member of the Goldman Sachs board, and Iris Bohnet, Academic Dean at Harvard Kennedy School of Government. In a wide-ranging discussion, they talked about the ability of young leaders to make a positive difference in the world, from business and finance to philanthropy and supporting NGOs. David Bernstein's advice for young leaders was always to always keep learning and striving to do better: "When your parents say 'work less hard' – ignore them!” he told us. The panel's other top tips for success included building a peer-to-peer mentoring group amongst close friends and colleagues; taking regular time out for self-reflection and career planning; and contributing time and skills to charitable and other good causes. Ian Powell, UK Chairman of PwC, hosted another panel discussion on leadership later in the week in conjunction with the New York Times, which included Alliance Trust CEO Katharine Garrett-Cox, who emphasised business coach Marshall Goldsmith's top tip for young leaders (and also the title for his book): What Got You Here Won't Get You There. Apart from the YGLs, the WEF has also launched a new community – the Young Global Shapers – a network of 20-30 year olds from across the globe, who are also promising young leaders. Klaus Schwab, Founder and Executive Chairman of the WEF, hosted a panel session featuring Global Shapers and Nobel Prize winner Muhammad Yunus to discuss Generation Y's aspirations for a more stable and prosperous world.

My main task at Davos this year was to organise a panel event on the future of Europe and the Euro, entitled ‘Beyond the Crisis: What Next for Europe?’ Our Clifford Chance panel was moderated by BBC Business Editor Robert Peston and joined by Dr Gerard Lyons, Global Chief Economist at Standard Chartered; Mark Penn, former Special Advisor to President Bill Clinton; Pierre de Weck, Global Head of Private Wealth at Deutsche Bank; Josef Joffe, Editor of Die Zeit, Germany's biggest selling weekly newspaper; and Martin Wittig, CEO of Roland Berger Strategy Consultants. Over 250 senior leaders from business including Chairman, CEOs and senior directors from Fortune500 and FTSE100 companies, and lots of journalists, attended, so it was a great success. This was the first time we had put on such an event, and as the youngest member of our delegation, it was great to have been given the freedom to plan and organise such a high-profile event in Davos.

So, throughout the Davos programme this year, the potential of young leaders to make a difference was very much celebrated. And their optimism mirrors TheCityUK's own faith in the next generation. The NGV group, having released its report last October, is now busy making plans to build a broad coalition of supporters – of young leaders and more established figures – throughout the City and beyond to turn our Vision into reality. This year was my second time in Davos, and once again it was an inspiring and exhilarating experience, providing me with ideas, energy and contacts which will be invaluable in embedding the ambitions of the Next Generation Vision into the fabric of the UK's financial and professional services sector.

You can follow Alan Mak on Twitter @AlanMakUK

You can sign up for the Next Generation Vision's first networking event on Tuesday 21 February by following this link.

Excellence in Islamic finance

Thu, 02 Feb 2012 07:30:09 +0000

Islamic finance is growing as a source of finance for both Islamic and other investors around the world. The UK is the leading Western centre for Islamic financial services (IFS), with London as its world leading financial services centre.

Globally, the demand for Islamic finance is clear. The market for IFS as measured by Shariah-compliant assets rose by 10% to reach $1,041bn by end-2009, taking global assets above the US$1,000bn threshold for the first time: a respectable outcome in the context of the difficult economic environment. Our own research estimates that the global market for Islamic finance grew at a similar rate in 2010, and has the potential to sustain this rate of growth over a number of years. This is, however, largely dependent on major markets in the Middle East not being affected by the spread of political upheaval in the region.

Banks, Sukuk listings and management of funds are buttressed by the UK’s uniquely strong infrastructure of professional support for Islamic finance deals and transactions. This includes more than twenty major law firms professional service organisations – including the ‘Big Four’ accounting practices – all of which have established teams providing specialist Islamic finance services covering tax, listings, transactions, regulatory compliance, management, operations and IT systems. This extent of expertise has yet to be seriously rivalled by other Western financial centres.

The Sukuk (Islamic notes that represent an alternative to conventional bonds) market recovered strongly in 2010 with record issuance of US$50bn and while there have been defaults, the impact on the broader market has not been as extensive as was feared a year or two ago and quality issuers of Sukuk continue to attract demand from investors. Indeed, the UK has a strong interest in the development of the Sukuk market. The London Stock Exchange has proven to be an attractive draw for Sukuk issuance. As at Q1 2011, the number of Sukuk listing at the LSE totalled 31, with an aggregate value of US$19bn.

Bank revenues also picked up in 2010, following downward pressure on revenue and profitability in the two previous years. The 22 banks in the UK offering Islamic finance products now exceed that of any other Western country. 2010 also saw the global Islamic fund management industry increase by 7.6% to US$58 billion, bucking the relatively flat growth trend of previous years.

As Islamic finance expands and the range of products continues to broaden, there is a growing global demand for education and skills and UK institutions are today at the forefront of providing qualifications for the global industry. Courses in Islamic finance are now offered by over thirty professional institutions, colleges and universities spanning the full range of qualifications; from school level through vocational and career-based qualifications as well as undergraduate and postgraduate degrees.

With all of these factors in place, the potential for growth in UK-based IFS is immeasurable. The UK financial services sector represents a springboard for global growth and the partner of choice in the delivery of Islamic finance excellence. UK based providers are increasingly focusing on services that complement those available in other centres, and at the UK Islamic Finance Secretariat (UKIFS), a part of TheCityUK, our goal is to continue with the development of strong partnerships with other global Islamic finance centres and to support the favourable environment for investment opportunities in Islamic finance.

If you would like to be first to receive our latest research, including our 2012 report on Islamic finance, register at this address.

To find out more about membership of UKIFS and how it can benefit your business, contact us.

Azerbaijan's economic potential

Wed, 01 Feb 2012 18:21:04 +0000

This week we hosted a Roundtable on Azerbaijan with Peter Bateman, HM Ambassador in Baku. The event proved how the BRICs face fierce competition from smaller, but attractive, emerging markets. Azerbaijan has almost twice the population of Scotland, a $30 billion sovereign wealth fund and a real GDP growth rate for 2011 of 3.7% p.a. The United Kingdom is the largest single foreign investor, worth more than half the total, and UK-based companies are in pole position to provide more goods and services to this growing market.

Some 25 firms heard how Azerbaijan’s economic development and regional ambitions mean a major market with a total GDP of $90 billion was looking to modernise, diversify and develop – with their help. The Ambassador was joined by TheCityUK members from banks, exchanges, advisory firms, insurers, law firms, accountants and investors.

This is not an event that you would have seen on a forward calendar, it was one that we put together at short notice and entirely in-house.

Glasgow: a world class financial and professional services location

Tue, 31 Jan 2012 16:24:35 +0000

In one of our most eagerly anticipated seminars to date, over 50 individuals from politics, finance and academia gathered yesterday to discuss the future of financial and related professional services in Glasgow’s International Financial Services District, the wider city and throughout Scotland.

The Herald Scotland highlighted the event in its Sunday edition quoting our research showing that 12.1% of Scottish GDP is earned by financial and professional services, the highest proportion outside London (25.2%). Our seminar followed hot on the heels of an announcement at the end of 2011 that US investment bank Morgan Stanley would hire 250 additional staff on top of the 1,100 already located at the firm’s Glasgow operations hub. Other firms with a significant presence in the local area include JP Morgan, Lloyds Banking Group and insurer AON.

The smart client suite of Barclays Wealth on Bothwell Street played host to the day’s event which included a panel featuring:

Fergus Ewing MSP, Minister for Energy, Enterprise and Tourism;
Darrell Sansom, Managing Director AXA;
Jack Perry, Barclays Wealth;
Professor Farhad Noorbakhsh, Head of University of Glasgow’s Business School;
Chris Cummings, CEO of TheCityUK.

All the panellists emphasised the strong and competitive pool of talent in Glasgow. The city boasts four universities, twelve colleges and other specialist higher education centres. It was noted that demand for financial services related courses in the region is increasing dramatically – in particular from overseas.

Fergus Ewing MSP addresses TheCityUK Glasgow seminar

Jack Perry highlighted that financial services are incredibly important for the whole of the UK, not just in the City of London: with around one in 13 of Glasgow's total workforce employed in the financial sector it is easy to see why.

Darrell Sansom was keen to explain why the location of Glasgow works for AXA. With over 400 employees based in the city, he pointed to the need to be close to customers in an area offering a skilled and available workforce, with a great attitude. Their philosophy is to ‘hire for attitude and train for skill’. In addition, there is support for Glasgow as an enterprise zone, helping to create a high quality and effective workforce .

Professor Farhad Noorbakhsh drew attention to the importance of recovering and maintaining basic trust in the industry through appropriate risk management programmes, governance and accountability.

Fergus Ewing MSP underlined how important financial services are to the Scottish economy with 85,000 people in Scotland directly employed in the sector. He believes there is a relatively high degree of trust in the sector generally in Scotland, which may be a key reason why so many companies have chosen to locate in Scotland: Barclays has recently invested significantly in its premises; Morgan Stanley continues to further invest in Glasgow; J.P. Morgan picked Glasgow from 20 sites around the world; and Lloyds Banking Group employs over 1,000 people at its Glasgow call centre. All of these firms are committed to business growth in Scotland.

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