AS THE political dust kicked up by the election settles and the financial reform agenda takes shape, it is clear that the City lies at a crossroads.
Although we wish to ensure the UK remains home to a world-leading financial services sector, and an excellent place to work and live for future generations, there is no point disguising how difficult this will be.
Undoubtedly the most pressing area of concern for the industry at the moment is regulatory and fiscal reform.
Of course we cannot return to business as usual by ignoring the lessons of the financial crisis. We cannot do that – and no-one wants to.
What we now need is certainty, clarity and confidence in the business environment when it comes to reform.
The new government provided some much needed detail on this front last week by publishing its coalition agreement.
We welcome the Chancellor’s commitment to create the “most competitive corporate tax regime in the G20”, and one that underlines the fact that Britain is open for business. Only by continuing to attract the top institutions and individuals can we maintain our position in the international marketplace.
That is why the UK needs a flexible immigration policy for skilled migrants capable of filling gaps in the labour market. Turning away talent makes little business sense.
People from across the globe gravitate towards the City because of our financial and professional services cluster, as well as the cultural and lifestyle attractions here in the UK.
Foreign direct investment contributes more than a quarter to London’s economy, generating over £52bn each year.
And as Lord Mayor, I repeatedly stress the benefits of doing business here to decision-makers in overseas markets. I am currently leading a City delegation to Singapore, Japan and Indonesia to strengthen regional and bilateral ties in asset management, Islamic finance, capital raising and public-private partnerships.
Whilst some people view the predicted shift in the financial centre of gravity towards Asia as a threat to London’s position, I prefer to see it as a great opportunity for closer partnership and mutual growth.
More and more people across Asia will need access to quality financial services as these markets continue to mature. And the City is in a position to help meet this demand – either directly or through collaboration with domestic suppliers.
To achieve this, however, we must build trust by practising what we preach when it comes to openness and working together on a level playing field.
The UK today is the leading western country offering Islamic products, with 22 banks and 20 law firms having expertise in this field.
But in order to make the most of our expertise we need to tap into markets like Indonesia, which has huge potential as the world’s most populous Muslim-majority nation.
London has long been a gateway into Europe for top Asian firms, and by further strengthening our financial ties we can meet our respective challenges in this new era.
Nick Anstee is Lord Mayor of the City of London.