UK finance executives worried by regulation – CBI
LONDON, Jan 18 (Reuters) – London’s status as a world financial centre is at risk due to a combination of rising regulation and global economic shifts, according to senior executives polled by Britain’s biggest business lobby.
London has emerged from the 2008 banking crisis but it faces fresh threats from a transfer of economic power to Asia, as well as potential unilateral regulatory action aimed at prevening a repeat of the financial meltdown, the Confederation of British Industry quoted company executives as saying in a report.
“London will lose market share, though it won’t diminish in importance,” Stephen Green, chief executive of HSBC, Europe’s biggest bank, told the CBI. “This is not because of the financial crisis, but because of shifts in the global economy.”
Other executives singled out a potential regulatory crackdown in the wake of the banking crisis as the most serious threat to the British capital’s financial services sector.
“What is potentially damaging to London is if the regulatory burden becomes too burdensome,” the report quoted Michael Spencer, chief executive of interdealer broker Icap, as saying.
British regulators are expected to set higher capital requirements on banks, making them more risk-averse, but also less profitable during boom times.
Banking industry executives are also concerned that rising personal taxes could force many financial services companies to shun London in favour of rival centres such as Singapore or Hong Kong.
Britain’s top rate of income tax is set to rise to 50 percent from 40 percent in April. The government has also introduced a one-off 50 percent levy on banking sector bonuses that exceed 25,000 pounds.
Interdealer broker Tullett Prebon said last month it would help relocate staff who wished to escape rising tax levels in Britain to its offices abroad. (Reporting by Myles Neligan; Editing by Dan Lalor) ((firstname.lastname@example.org: +44 207 542 13 73))