The financial services industry has had to navigate a number of storms – some self-inflicted, others not. From Occupy to Libor-rigging, issues and events have pushed the City onto the front pages.
But despite the stormy headlines, one overwhelming theme from my business missions abroad has been that London’s high standing remains intact.
Many of the people I have met overseas – and indeed across the UK – recognise that our role as a global financial centre is an asset that generates real economic benefits. For example, in Mexico and Brazil (where I managed to be the first Brit to row the 2016 Rio Olympics course just a week ago) there was a very strong appetite to make use of London as platform for their worldwide work. These missions made me realise that there are huge opportunities for British business around the world. All we have to do is seize them.
There was also recognition that London has moved quickly to make changes – although we must remain committed to reform. Regulatory changes have already helped address many of the issues that emerged. And, equally importantly, there is a growing recognition of the need to focus on instilling a culture where people do the right thing, rather than just paying lip-service to the rules.
Competitiveness should not be forgotten. We are not witnessing a mass exodus – the grass is not greener in other major centres. But there are some signs of business moving or being redirected to other European centres, notably Luxembourg.
Over the past year, we have seen the industry respond to changes in the business environment. A number of banks – the most recent being UBS – have announced job cuts in their investment banking operations as they become less profitable.
Critics are hailing the decline of the City but I would argue that the opposite is true. Communication and technology firms are taking up an increasing amount of office space in the Square Mile, while new business activities in financial services, such as renmimbi trading and social investment, demonstrate considerable growth potential. This adaptation and renewal – something London has traditionally been very good at – is beneficial for UK plc.
The City’s economic footprint extends far beyond the Square Mile, with over 2m jobs spread across the country including my native Yorkshire, Scotland, Liverpool, Manchester, Norwich and elsewhere.
That is why – like Team GB and Paralympian GB at London 2012 – we must all pull hard in the same direction to cross these difficult waters together.
David Wootton is lord mayor of the City of London until 9 November 2012.