In a recent poll of executives at corporate majors by Lloyds Bank, a majority of executives felt that London may be set to surrender its position as one of the two leading world finance capitals, the other being New York.
Lloyds released its financial institutions sentiment survey which revealed that 64% of sector leaders are of the opinion that compared to its rivals, the City of London will remain stifled as a global hub, according to reporting from business-focused newspaper City A.M. published earlier in the week.
A historic financial district, the City of London, or as many simply call it, the City, is home to both the London Stock Exchange and the Bank of England.
Lisa Francis, managing director at Lloyds Bank Corporate and Institutional Banking, said in an interview with the newspaper, “The City of London’s status as a leading financial centre is at an inflection point.”
As the district has faced a crisis in confidence, several firms have begun to abandon the listed markets in London, to head for other major stock exchanges. After the failure of the British government to persuade UK chipmaker Arm Holdings to list in London, the chip designer went on to debut successfully on the Nasdaq stock exchange in New York.
One quarter of companies say that if London should lose its status as a leading financial hub in the next five years, they would want to relocate at least some of their British-based staff overseas.
David Gauke, head of public policy at Macfarlanes and a former treasury minister said in a media interview, “A number of factors, including political uncertainty, Brexit and increased international competition, mean that we cannot be complacent that it will always be at the very top.”
Chancellor Jeremy Hunt introduced a suite of reforms called the Edinburgh reforms in December to address the worries. The reforms were intended to “unlock investment and turbocharge growth” by repealing “burdensome pieces of retained EU law.”
The UK government has begun by passing the flagship Financial Services and Markets Bill which gives local regulators the authorization to make decisions which previously needed to be made at the EU-wide level.
In the poll, 80% of those who responded said London’s status would benefit from better relations between the UK and EU. Only two-fifths said skilled workers should have relaxed immigration rules.
Gauke said, “The UK needs to demonstrate that we are committed to being an open economy, willing to attract talent and investment here, prepared to embrace innovation but also capable of providing political and regulatory stability.”
