THE City might be in the doldrums about its declining global status, but there is at least one well-respected financial expert that London has tempted back from an Asian hot spot – he just happens to be a regulator.
Martin Wheatley, current chief executive of Hong Kong’s Securities and Futures Commission, will return in September to create and head up the UK’s brand new Financial Conduct Authority, a watchdog being formed to take over a chunk of the FSA’s functions when it is abolished next year.
At the Economist Bellwether Conference in London yesterday, Wheatley found the great and good of the Square Mile pressing their business cards into his hand. “We’re happy you’re back,” he was told. “It’s like he’s David Bowie!” joked one observer.
Surely only in London could Wheatley, peering neatly over his half-moon spectacles, spark comparisons with Bowie.
But the sense of anticipation at least shows that London remains a leading global master in one area: regulation. “Having been in Hong Kong for six years, the one market we look to most in terms of global leadership is London,” he told City A.M.. “The UK has always been one of the dominant thought leaders in regulation. It is less captured by the industry it is regulating than anywhere else.”
As for the doom and gloom narratives of the City’s diminishing status, he is dismissive: “I don’t think in terms of London being in decline. In fact, with the current economy, the financial industry will become more important in the UK.”
He is also sanguine about the prospect of competing regulatory regimes, despite banks decrying the lack of “a level playing field”.
“We’ll start with a patchwork but the situation is evolving,” he says. The reason for the mismatch, he says, is that different financial centres have different business flowing through them: “For example, Korea is more worried about currency swaps, whereas Singapore and Hong Kong are interested in interest rate swaps – you respond to what is changing.”
But he recognises the City’s concern about its voice being swallowed by Europe, with mutterings that overhauling the FSA during a pivotal year for regulation has not helped London’s lobbying power. “I’m well aware of the concern and we have to work hard at it. It is a concern now because before the directives always had a get-out clause. Now... they are rules rather than directives,” he says.
“But London is a large percentage of Europe’s finance. There’s clearly a mismatch, but we’ve accepted that compromise on the basis that a single market will be able to compete better,” he adds.
As for his new role in the UK, he is tight-lipped. Does he think the Vickers Commission is right to recommend ring-fencing banks’ retail operations? “It’s early days,” he says diplomatically. It’s not quite David Bowie.
CV | MARTIN WHEATLEY
Job: Chief executive of the Hong Kong Securities and Futures Commission, member of Financial Stability Board. Will head FSA business unit in September and lead the Financial Conduct Authority in 2012.
Past roles: Deputy CEO of the LSE, chairman of FTSE International, sat on the FSA’s Listing Authority Advisory Committee.