The chief executive of Barclays (BARC.L) has said the government should focus on New York and Singapore, rather than Europe, as the UK looks to keep its competitive edge in finance post-Brexit.
Jes Staley told the BBC in an interview on Friday: “What London needs to be focused on is not Frankfurt or Paris, it needs to be focused on New York and Singapore.”
Staley’s comments come as Westminster begins plotting a path for the UK economy post-Brexit. There has been talk of deregulation that could lead to a “Big Bang 2.0” for the City — referencing the explosion of activity that followed deregulation in the 1980s.
Staley said there was no appetite for deregulation in the City of London and urged lawmakers to focus on regulating new and emerging parts of the economy. The UK will be part of a global race to win business in new and emerging sectors, and nimble regulation would give businesses the certainty needed to set up operations in the UK.
Staley highlighted a recent move to legislate for the buy now, pay later sector — dubbed a “preventative” measure by the regulator — as a prime example. He said green finance could be another area of focus.
“Climate today is like technology was in 1995,” he said. “All the Amazons, the Googles, didn't really exist in 1995 and now it dominates 40% of the economy, I think it's a fair argument that dealing with climate and dealing with the environment is in the same position now.”
The battle to stay competitive comes amid a fight for access to the EU for financial and professional services. The UK officially left the EU on 1 January with a “skinny” trade deal that did not cover services. The City and Westminster are now lobbying for “equivalence” decisions from Brussels that would allow investment banks in London to service clients across the single market.
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Early data suggests that while euro-denominated share trading has moved to trading venues based in the EU, settlement of euro derivatives has shifted to New York. London has traditionally dominated the multi-trillion euro derivatives market.
Mile Celic, chief executive of industry group TheCityUK, told a House of Lords committee last month that New York would likely be a “big winner” from Brexit.
“There is logic for large financial service institutions, financial services activity that you tend to be drawn to areas of scale, of mass — it sort of has this magnetic effect,” he said. “There are two major international financial centres globally — one is London and the other is New York.”
Catherine McGuinness, the policy chair at the City of London Corporation, told Yahoo Finance UK in a separate interview on Friday that EU leaders should consider “whether they’re happy to undermine us and see the business go to New York or Singapore.”
Staley conceded that jobs and assets had left the UK as a result of Brexit but said the decision to leave the EU was “more than likely on the positive side than on the negative side”.
“Brexit gives the UK the opportunity to define its own agenda,” he told the BBC. “In defining that agenda around financial services, staying competitive with other markets is really what the government here should be focusing on and I think that is what they’re focusing on.”
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