This week at the Mansion House, I will host one of the Square Mile’s biggest events of the year. The annual Bankers’ and Merchants’ Dinner provides an opportunity for the chancellor and the governor of the Bank of England to speak in front of an audience of senior business leaders, captains of industry, regulators and media commentators. If you believe the recent press rumours, we’re going to get an update on the Treasury’s plans for selling the government’s stake in RBS.
Over the weekend, I put the finishing touches to my own speech. Although it won’t touch on RBS directly, it will cover an issue that is closely linked and indeed equally scrutinised, especially over the past few years – the City’s reputation.
It’s still an issue of tremendous importance and relevance. Court cases are ongoing for those in the financial services sector found breaking the rules, and new fines are being imposed on banks for scandals that are still being uncovered. With that in mind, the main message from my speech will be crystal clear: the City does not and will never condone this sort of behaviour. Just because somebody isn’t watching doesn’t mean theft isn’t theft.
On the contrary. Quite rightly, the regulators and relevant authorities should come down like a tonne of bricks on people who put personal gain ahead of professional integrity.
Yet when I travel abroad and the topic of reputational damage to the City comes up in discussion, the people I speak to have a very different response to those back in the UK. Our international trading partners don’t simply want to know what went wrong in the past, they want to know what action we have taken to stop it happening again in the future, and what they can learn from our experience.
That is why I am looking forward to the forthcoming publication of the Bank of England’s Fair and Effective Markets Review, which will assess the way wholesale financial markets operate and help to restore confidence in the City. It will be the next step in the restoration of the City of London’s reputation.
On a related note, I was interested in a recent report by an American class action law firm. I wonder why they were intrigued? It suggested that the problems that we have faced in the UK are worse than those in Wall Street. As an ambassador for the UK’s financial and professional services sector, this really is something I cannot agree with and I’d dispute the findings.
However, where I think we can agree is that this won’t be the end of the road when it comes to the damage done to the Square Mile. We should therefore look forward to the Fair and Effective Markets Review as the next step in this process. As Mark Carney said last year at the very same event, we need to continue to work hard to restore integrity to markets and the banking system. I couldn’t agree more.