The City of London is a global leader in financial services, a crown jewel of one of the world’s leading cities, and a true innovator where finance meets tech to create limitless opportunities.
Like a typical case of opposites attract, the mix of heritage blended with a new wave of enterprising spirit has helped maintain the capital’s position as an international hub.
It hasn’t always been plain sailing, though.
In 1986, the City, and indeed the rest of the world, faced a significant amount of change with the financial Big Bang. It marked a huge amount of deregulation: market volatility in the immediate aftermath was inevitable. Now, more than 30 years later, the UK is facing the latest possibility of significant changes to the sector – Brexit.
Like the Big Bang, there was a highly sensitised reaction to Brexit: the price of shares in UK banks tumbled; the value of sterling fell; and equities in both the FTSE 100 and FTSE 250 fell sharper still. But, once again, the financial services sector collected itself.
As I write this, the UK is bracing itself for the Prime Minister to trigger Article 50 – the official notice by which we will leave the European Union. And amid months of lobbying from businesses across the UK and European leaders making their stance on negotiations known, it’s sure to be a poignant moment for Theresa May. Poignant not just because it’s the first time a country has left the EU – which incidentally celebrated its sixtieth anniversary this weekend – but also because the negotiations that lie ahead will impact the UK economy, its businesses, its culture and its people.
As we edge closer to the date which is sure to go down in the history books, it’s a good opportunity to reflect on what the financial services sector needs to see from negotiations.
First, it’s worth pointing out that the current EU framework has served the financial services sector well. Our involvement with our European counterparts has helped form important pieces of legislation that have improved the sector across the continent.
There is no desire for these regulatory frameworks to be immediately revoked or amended. For firms that are headquartered in London they need to see quite the opposite in fact; they need to see a continuation of these laws and frameworks in order to continue serving their customers. Ideally, the final Brexit picture for the financial services sector would look similar to the one we’ve already painted.
If government does take steps to amend legislation, it’s important to have a structured approach to transition. Firms will need time to analyse the implications of changes, and to implement those changes in an efficient and fully compliant way. Different pieces of legislation will have different time constraints and so it’s important that government provides for realistic timings.
London has become a global leader because it has been equipped with some of the finest talent from across Europe and the rest of the world. Talent which has not only bolstered the financial services sector, but enriched the culture of the Square Mile and the rest of London. In order for the UK to keep its crown jewel, access to the same talent is vital.