Key to this is ensuring that people working in our institutions from top to bottom meet the right standards of conduct.
Parts of the industry have faced a number of scandals in recent years, and scrutiny has intensified over the last few months following concern over the behaviour of foreign exchange traders and in the Libor market. It is clear that these allegations must be investigated thoroughly, and appropriate legal action must be taken if wrong-doing is proven.
It is important to recognise that these activities – most obviously foreign exchange trading – are international in nature.
If we are to tackle these problems effectively, regulators in both the US and the UK must work together to ensure that reforms are pragmatic, carefully coordinated and consistently enforced.
We have a shared interest in working together to ensure that global regulatory standards establish a level playing field for all – a point I also made last month in Athens, when visiting ahead of Greece taking over the EU Council Presidency in January.
This is particularly pertinent when it comes to contentious third party access issues linked to Mifid, affecting a range of firms outside of Europe, including the US. The devil, as always with regulatory reform, will be in the detail.
In the US, it is important that we establish a dialogue with regulators as important developments take place on capital requirements, the Dodd-Frank rules, the swaps market and resolution authority – as well as potentially the Transatlantic Trade and Investment Partnership.
These changes will reshape the UK and Europe’s relations with the US, so it is crucial we get it right now. One of the reasons I am in New York this week is to meet regulators, policy makers and businesses to start this dialogue and begin to resolve these issues.
Regulation must transcend national boundaries in order to enable businesses to work effectively across borders without unnecessary duplication of compliance costs.
Just as crucially, international standards will enable the industry to address the lessons learned from recent scandals and repair its reputation.
New York is an important ally for London here, and we should make use of our special relationship to tackle the complicated aspects of regulation.
In time, I hope that this more effective regulatory climate will restore the public’s confidence, and eventually help us draw a line in the sand following these international scandals.
Mark Boleat is policy chairman at the City of London Corporation and a regular columnist for this newspaper, alternating with the Lord Mayor. The Corporation’s website can be found at http://www.cityoflondon.gov.uk/