Speaker 1: Catherine. We haven't had you on the podcast for three weeks.
Speaker 1: Have you been every week? I hope? And so I'm
Speaker 1: very excited today our prayers have been answered. Right, We've
Speaker 1: got some news, big news, big bang news, in fact,
Speaker 1: big bang news. Although I guess we're slightly wondering is
Speaker 1: it is it a small whimper that they're trying to
Speaker 1: package is a big bang? Now we're in that territory.
Speaker 1: That is the question, right when is a big bang
Speaker 1: a small whimper? I think that's what you need to like.
Speaker 1: This is such a philosophical question. Stay tuned for the answer.
Speaker 1: I'm David Merritts and I'm Francine Laqua and this is
Speaker 1: In the City, Bloomberg's podcast, connecting you to the stories
Speaker 1: and the voices at the heart of the City of London.
Speaker 1: This week Big Bang two point oh, it's back, Dave,
Speaker 1: of course, being the long promised relaxation of post brexit
Speaker 1: financial services rules. That's everyone in the city has been
Speaker 1: waiting for this and we've had a big step forward
Speaker 1: this week. We voted for Brexit and now there's an
Speaker 1: opportunity to sweep aside unnecessary rules and regulations that were
Speaker 1: holding back economic growth, So what will they mean Dave.
Speaker 1: My conversation also with the newest Lord Mayor of the
Speaker 1: City of London, Nicholas Lions. He shows his vision for
Speaker 1: elevating the city during his year as Lord Mayor. And
Speaker 1: then this week's big news, we have the relaxing of
Speaker 1: what is called the ring fencing of banks. That was
Speaker 1: a rule brought in after the financial crisis of two
Speaker 1: thousand and eight. Seems that is about to be scrapped.
Speaker 1: So we're going to talk to Bloomberg's Finance editor Katherine Griffiths,
Speaker 1: who will walk us through what ring fencing is, why
Speaker 1: there's been a change of heart, and how the UK
Speaker 1: plans to turn this into its next big bang. So Catherine,
Speaker 1: welcome to the podcast. We may no longer have ring
Speaker 1: fencing in the UK. Is that a real game changer
Speaker 1: for banks? Yes, Um, it would be a big game
Speaker 1: changer if they really did take down the ring fence. Um.
Speaker 1: I think quite possibly they'll do something smaller than that.
Speaker 1: They may mess around with the level that the ring
Speaker 1: fence kicks in at, which is billion pounds of deposits.
Speaker 1: They may mess around with the rules so that it's
Speaker 1: easier for banks to sort of serve customers that fall
Speaker 1: on either side of the ring fence. Um, they may
Speaker 1: exempt kind of smaller banks that don't do anything risky.
Speaker 1: We're not quite sure at this point. So just to
Speaker 1: explain to all to our listeners who might not be
Speaker 1: back clear what ring fencing is, Katherine, this was the idea.
Speaker 1: The idea was to separate out retail banking, so general
Speaker 1: consumers and their bank accounts from the kind of the
Speaker 1: risky stuff, right investment banking and all the stuff that
Speaker 1: blew up in two thousand and eight. Can you explain
Speaker 1: what they're thinking was there? Yeah, that's exactly. It's so
Speaker 1: ordinary people had to spend forty six billion pounds bailing
Speaker 1: out Royal Bank of Scotland UM, and other many other
Speaker 1: painful things too. After that, the idea was that we
Speaker 1: should never have to do that again. So one of
Speaker 1: the measures that was put in place was this ring
Speaker 1: fencing idea, so that banks, big banks should slice themselves
Speaker 1: into two parts. Um, the sort of high street lending
Speaker 1: to individuals and small businesses, medium sized businesses, That stuff
Speaker 1: goes inside the ring fence, and then the riskier, more
Speaker 1: volatile investment banking business which sits in another entity outside
Speaker 1: the ring fence, and the idea is that if that
Speaker 1: bank gets into trouble, the investment banking business can can
Speaker 1: be left, can can fail, and that's fine, the market
Speaker 1: can absorb that, but that the the safe retail deposits,
Speaker 1: small business lending part needs to be protected. It needs
Speaker 1: to be a much safer institution with its own capital,
Speaker 1: so that taxpayers don't in the future have to bail
Speaker 1: out those entities ever again. But so Cather, just to
Speaker 1: be clear at these measures, as you say, basically designed
Speaker 1: as way as to avoid another future taxpayer bailout. We're
Speaker 1: not hu mandated. There were British rules, Yes, there were
Speaker 1: British rules, and the idea was that banking makes up
Speaker 1: such a huge part of the UK economy. It was
Speaker 1: a really central part of the thinking of officials at
Speaker 1: the time that we needed to have these really really safe,
Speaker 1: robust rules. But so no other banks in Europe had
Speaker 1: to do the same. So European and US banks have
Speaker 1: versions of ring fencing. But one of the arguments put
Speaker 1: forward in this country is that our rules are particularly draconian. Right,
Speaker 1: but you know, this being built as a Brexit dividend
Speaker 1: that's not quite right. Then this is something we unilaterally
Speaker 1: introduced in the UK and therefore presumed even if we
Speaker 1: were still in the EU, EU could unilaterally remove. Yeah,
Speaker 1: that's right. This doesn't have to be a Brexit dividend. Um.
Speaker 1: And there's been thinking on tinkering around with the ring
Speaker 1: fence for quite a while. I mean weirdly. Actually, ring
Speaker 1: fencing only came in because it's so kind of complicated
Speaker 1: in cumbersome and banks spent about collectively have spent about
Speaker 1: three billion pounds making all the changes they needed to make. Um.
Speaker 1: So officially it's only been with us since. But there's
Speaker 1: a view that you know, markets change, economies change, and
Speaker 1: so they needed to be a sort of rethink about
Speaker 1: whether we still needed ring fencing. So under the sunac government,
Speaker 1: I guess ring fencing has been one of the many,
Speaker 1: many pieces of legislation under review and trying to help
Speaker 1: the bolster the financial service sector. Yes, it was. It's
Speaker 1: been reviews reviewed by SUNAC UM and someone called Keith Skiokuza,
Speaker 1: senior business figure, was commissioned to do a report. Um.
Speaker 1: He did that report and he recommended a range of things.
Speaker 1: It was quite a sort of conservative report but it
Speaker 1: did say that these smaller banks that didn't do anything
Speaker 1: risky perhaps shouldn't be subject to ring fencing rules. It's
Speaker 1: a bit of a sort of regulatory car crashes in this.
Speaker 1: I mean, two thousand and eight was the financial crisis.
Speaker 1: You know, the world nearly came to its knees in
Speaker 1: terms of the banking system, and more than it takes
Speaker 1: more than a decade to implement this rule that's supposed
Speaker 1: to protect people's savings and personal bank accounts, and just
Speaker 1: three years later they've decided it's not fit for purpose. Yes,
Speaker 1: I mean I strongly suspect they won't actually do anything
Speaker 1: particularly radical on ring fencing. I think they may tinker
Speaker 1: around with it. And the thing is if if they
Speaker 1: if they exempt the likes of TSB Virgin Money, these
Speaker 1: sort of medium sized banks in this country, that's great
Speaker 1: for them, but it really won't kind of release billions
Speaker 1: of pounds of capital into the economy because they don't
Speaker 1: really do anything that's not not ring fence business. So
Speaker 1: if they suddenly don't have a ring fence, there isn't
Speaker 1: this sort of magical benefit that will be created. I mean,
Speaker 1: it's probably a sensible measure, but I think perhaps the
Speaker 1: notion that it will kind of unleash lots and lots
Speaker 1: of capital into the economy might might not be true
Speaker 1: because we've we've got the City Minister. I've got a
Speaker 1: quote a hit from him and Drew Griffiths who said
Speaker 1: this week we can make the UK a better place
Speaker 1: to be a bank to release some of that trapped
Speaker 1: capital over time around the ring fence. But sounds like
Speaker 1: what you're saying, Katherine, and he's he's not being entirely
Speaker 1: straightforward there. Well, um, I mean that's a shocking thought
Speaker 1: for an instant not to be straightforward. Um. I mean,
Speaker 1: I think it will be really interesting to see what
Speaker 1: they are actually planning. One of the kind of sort
Speaker 1: of juicy juicy aspects to this is whether they raise
Speaker 1: the level from twenty five billion that's the level of
Speaker 1: deposits you have before you have to go into the
Speaker 1: ring fence, to say fifty or a hundred. Because if
Speaker 1: they go down that path, some of the chief beneficiaries
Speaker 1: will could well be the big American banks. So Goldman,
Speaker 1: Saxes Marcus has about twenty three billion pounds worth of
Speaker 1: deposits at the moment in the UK and Chase. The
Speaker 1: digital bank from JP Morgan has sort of just over
Speaker 1: ten at the moment, so if they tinker around with
Speaker 1: the level, then it might be those banks that have
Speaker 1: big benefits. So Big Bang two point oh, was this
Speaker 1: like Liszt Trust? Was this something under Quarte? And this
Speaker 1: goes back to hurricanes bag, to the wave of deregulation
Speaker 1: six which at the time actually really made London a
Speaker 1: financial center. But things are different now. We were not
Speaker 1: innovating like we were in six No. And actually one
Speaker 1: of the things I think it's quite interesting about back
Speaker 1: to the eighties, I was talking to a very senior
Speaker 1: person from the city, someone called Sir Nigel Boardman, who
Speaker 1: is now chairman of bus Not Bank and was a
Speaker 1: very senior lawyer at slaughter May for a long time,
Speaker 1: and he was reminding me recently that he used to
Speaker 1: sit on kind of panels back in the eighties asking
Speaker 1: which which kind of European financial center will will be
Speaker 1: the pre eminent one, just as Big Bang was happening,
Speaker 1: and he was saying that it wasn't at all clear
Speaker 1: at that point that London would in fact come out
Speaker 1: come out on top, and of course that is what
Speaker 1: happened so that was an inflection point, and you know,
Speaker 1: the optimists now think it's an inflection point now. I mean,
Speaker 1: although a lot of the stories, and we've talked about
Speaker 1: this on in the city in the last few weeks
Speaker 1: have pointed the other way, haven't they. We've seen Paris
Speaker 1: overtake London in terms of the overall market capitalization of
Speaker 1: the stock market. We've had stories this week about Golden
Speaker 1: Sacks moving jobs to Milan. Um. You know, the picture
Speaker 1: of London's dominance in Europe is pretty murky at the moment,
Speaker 1: isn't it. And the and the long term trend seems
Speaker 1: to be a drift of capital trading to other centers
Speaker 1: in the European Union. I mean, I mean this measure,
Speaker 1: which sounds like it's less impressive than perhaps on paper,
Speaker 1: isn't going to reverse that, isn't No, that's certainly not
Speaker 1: going to reverse it. I mean, what we're waiting for,
Speaker 1: very excitingly for our Christmas present is a wider a
Speaker 1: wider range of ideas from the City Minister Andrew Griffith.
Speaker 1: They're meant to be coming before Christmas, so um, you know,
Speaker 1: perhaps along with this Santa with his Santa hat on
Speaker 1: going around the city. Who's going to get a lump
Speaker 1: of coal? Um? They assume, yes, exactly there you know
Speaker 1: there will be others, um, so we may we may
Speaker 1: get some others which as and I suppose the point
Speaker 1: is perhaps that you know, cumulatively, they may well have
Speaker 1: have an effect. I mean people will say London has
Speaker 1: a huge liquid markets and lots and lots of expertise, um,
Speaker 1: the language, the times and all the rest of it.
Speaker 1: I mean, these are very substantial things. So if Griffith
Speaker 1: does in fact come up with some really sort of
Speaker 1: meaty ideas, then perhaps it will make a difference. Catherine,
Speaker 1: thank you so much. Always always under money, Katherine Griffin there,
Speaker 1: thank you. I mean, Frank, I just think it's amazing
Speaker 1: that this big bang so called the government is trumpeting.
Speaker 1: When you start looking under the herd, it's really nothing
Speaker 1: of the sort, right, And I just think, you know,
Speaker 1: what is the city going to really badly do substantially
Speaker 1: it is going to move the needle here? Yeah, maybe
Speaker 1: it's nothing of the sort they're trying. And this maybe
Speaker 1: was something different that we didn't have under the Boris government.
Speaker 1: And Dave I spoke to Nicholas Lions now he comes
Speaker 1: from a financial services background, which is a good thing
Speaker 1: for a Lord Mayor at the moment. That's right. He's
Speaker 1: somebody who's worked in the city for forty years. It's
Speaker 1: been an investment banker for more than twenty years, and
Speaker 1: the last eighteen he sat on the boards of insurance
Speaker 1: companies and asset managers and he's now taking a sabbatical
Speaker 1: for being chairman of Phoenix Group to take on this
Speaker 1: role of Lord Mayor. And his main point is really
Speaker 1: it's time to capture maybe some of the positives of Brexit.
Speaker 1: So we began by discussing how he's seen the city
Speaker 1: evolved over the past forty years. It has changed dramatically.
Speaker 1: I mean when I started, we still had stock jobbers
Speaker 1: who used to walk around the City of London and
Speaker 1: top hats. So fortunately we've moved on from that. No
Speaker 1: longer except what there's a little side street around here,
Speaker 1: actually two worktop has once in a while. Well that's true,
Speaker 1: but I think, you know, technology has made a huge difference,
Speaker 1: Globalization has made a huge difference, and we have always
Speaker 1: managed to attract the brightest and the best from around
Speaker 1: the world, and that's I think hugely to our credit
Speaker 1: and usually to our benefit, and I think that's probably
Speaker 1: the biggest change of all. Back in two it was
Speaker 1: a very sort of British city and now it's a
Speaker 1: very very multinational global city, and this is thanks to regulation.
Speaker 1: I mean, there was an attraction of capital to the
Speaker 1: city of London which was actually quite incredible in the
Speaker 1: last fourteen fifteen years, which I imagine has to do
Speaker 1: with the time zone. Time zone has been always a
Speaker 1: real help, but when we when we started looking at
Speaker 1: twenty four hour trading for international banks and asset managers,
Speaker 1: that really played to our strength sitting between New York
Speaker 1: on the one side and Asia on the other, So
Speaker 1: that I think has been a big, big benefit. But
Speaker 1: clearly changes in regulation. Big Bang was, it was a
Speaker 1: transformative thing, and now we're talking about Big Bang two
Speaker 1: point zero. But in the meantime has it declined in
Speaker 1: the last four to five years because regulation has not
Speaker 1: really maybe as nimble as other places like Amsterdam, or
Speaker 1: not been as aggressive enough as New York. I think
Speaker 1: it's absolutely fair to say that other financial centers have
Speaker 1: tried to take advantage of the uncertainty that was created
Speaker 1: by Brexit to try and build their own capabilities. But actually,
Speaker 1: you know, we we still have the same number of
Speaker 1: people employed in financial services here. We've we've still managed
Speaker 1: to increase the assets under under management here in the
Speaker 1: UK about ten trillion pounds of assets and international assets
Speaker 1: up from four point four to four point six trillion.
Speaker 1: There's never room form acency. And actually, the way I
Speaker 1: look at it is this is a wonderful wake up
Speaker 1: call for London as a global financial center as we
Speaker 1: look at technological changes that financial centers like Singapore are
Speaker 1: introducing that will that will help trigger a response from
Speaker 1: London that will be strong and and and coaching. But overall,
Speaker 1: has it has it lost something? You know since since Brexit?
Speaker 1: I don't think so, I really don't. I think, um,
Speaker 1: there are there were always going to be people in
Speaker 1: frontline jobs that because of Brexit had to relocate to
Speaker 1: other parts of Europe. But we've seen you know, small
Speaker 1: impacts in Dublin, in Luxembourg, in Paris, in Amsterdam, in Frankfort,
Speaker 1: but nothing compares to London. And you know, and London
Speaker 1: is always going to be the most powerful, the most
Speaker 1: important and most relevant global financial center in our time zone.
Speaker 1: Feel like every two weeks there's a story saying, well,
Speaker 1: after dam overtook us on the pipelines, or I p
Speaker 1: o s in the pipeline, or there was a story
Speaker 1: in terms of the how big the stock exchanges France
Speaker 1: overtook us two weeks ago. Yeah, you can. You know,
Speaker 1: you're always going to find little anecdotes to support particular theory. Um.
Speaker 1: It sort of depends which end of the of the
Speaker 1: lens you're looking through. Um. But it's not so much
Speaker 1: that London has to be the biggest at everything. The
Speaker 1: fact is what we are is an extraordinary ecosystem that's
Speaker 1: got a significant chunk of everything. And it's when you
Speaker 1: put the whole thing together. It's not just financial services,
Speaker 1: it's also traditional financial sort of fintech, which is where
Speaker 1: we're real leaders. But it's also the whole legal infrastructure.
Speaker 1: So you know, the primacy of the rule of law
Speaker 1: and our independent judiciary, the fact that contracts are written
Speaker 1: under English law. All over the world, people want disputes
Speaker 1: to be resolved oolved here in the UK because of
Speaker 1: the quality of our of our judicial system. So and
Speaker 1: we've got terrific risk management, compliance, technology management consultants, Order
Speaker 1: to the actor as you name it, it's when you
Speaker 1: look at it in the round, it's it's I'll stop
Speaker 1: short of saying it's impossible for anyone to challenge that,
Speaker 1: but it's going to take many, many, many decades of
Speaker 1: concerted effort, and frankly, I don't think that's going to happen.
Speaker 1: But the City of London with Boris Johnson as head
Speaker 1: of government is maybe different to the City of London
Speaker 1: with Prime Minister Rushi Sunac just because of the amount
Speaker 1: of attention and love it got from Boris Johnson. Is
Speaker 1: that fair? I think what I would say is that
Speaker 1: we now have in number ten and number eleven two
Speaker 1: people who really understand not just business but financial services.
Speaker 1: And that's I think very very important because we can't
Speaker 1: have a thriving national economy without an immensely strong City
Speaker 1: of London. And in purely factual terms, we know from
Speaker 1: the reaction of the bond markets to the Liz Trust
Speaker 1: qua quatting period of trust and omics as it's called,
Speaker 1: that there is a limit to the amount that you
Speaker 1: can just borrow to pay your bills. So we need
Speaker 1: growth and we need investment, and that has to come
Speaker 1: from the private sector, primarily from the private sector. Because
Speaker 1: the government doesn't have a huge resource at its disposal.
Speaker 1: There are two massive parts of capital in this country.
Speaker 1: One is in the real estate market and the other
Speaker 1: is in the pension market, and we need to mobilize
Speaker 1: pension capital. So you have an agenda of things that
Speaker 1: you want to to, if not pushed through, certainly reformed
Speaker 1: for the City of London. So there are there are
Speaker 1: three big areas that I really wanted to focus on
Speaker 1: in the course of my mayor or year and it
Speaker 1: is just I'm afraid one year. UM. One is an
Speaker 1: initiative around the global investment future. So this is a
Speaker 1: this is a scheme that Corporation works on with the
Speaker 1: Investment Association and the Department of International Trade to attract
Speaker 1: overseas capital from large asset owners to come into the
Speaker 1: UK and be managed in the UK. And we have
Speaker 1: a we have a plan by thirty to increase from
Speaker 1: ten trillion in the amount of assets that we have
Speaker 1: being managed here to twenty trillion pounds. The second area
Speaker 1: is around financial inclusion and within that sort of subset
Speaker 1: of financial literacy. Financial inclusion is a real challenge at
Speaker 1: this time with the with the cost of living crisis
Speaker 1: that we've got. We've got seventeen million people in this
Speaker 1: country with savings of less than one hundred pounds so
Speaker 1: and the only one and a half million of those
Speaker 1: who are unemployed. So over fifteen million people in this
Speaker 1: country are working in work. They're earning a wage, but
Speaker 1: they can't think beyond budget the budget for the next week.
Speaker 1: So I want to convene a meeting with a lot
Speaker 1: of the large financial service organizations, with the charities that
Speaker 1: are involved in financial inclusion and see if we can't
Speaker 1: get a really good plan of what's best practice around
Speaker 1: how we can help people. And it's easier to go
Speaker 1: that way instead of the government doing it because it's
Speaker 1: more efficient or it gets so quicker. I just think
Speaker 1: that it's the people who are who have the customer relationships.
Speaker 1: It's where the rubber meets the road. So there's a
Speaker 1: default I think to say the government should do everything.
Speaker 1: The truth of it is the government can't do everything.
Speaker 1: Um And I'm here to promote a resilient, resourceful and
Speaker 1: responsible city and therefore this is a really important area
Speaker 1: where the city can be responsible. How difficult will it
Speaker 1: be to attracts international capital to the UK given the
Speaker 1: turbulence and markets that we saw in October. When I
Speaker 1: talked to sort of sovereign wealth funds around the world
Speaker 1: and asked them to allocate more money here, and they
Speaker 1: raised this issue about sort of political turmoil. I remind
Speaker 1: them the city has been around for twice as long
Speaker 1: as we've had parliamentary democracy in this country. You know,
Speaker 1: we we have, we have survived everything that's come our way.
Speaker 1: We shouldn't lose lose sight of the fact that long
Speaker 1: term guilt yields are now down to below the levels
Speaker 1: that they were at before this trust became PM, so
Speaker 1: that the panic that there was in international markets. Bon
Speaker 1: bond investors are very sophisticated, you know, they do the maths.
Speaker 1: They look at government plans and government strategies, and the
Speaker 1: Prime Minister and the chances of the Exchequer, to be fair,
Speaker 1: have put together a really coherent plan to get us
Speaker 1: to balance the books. That has restored confidence. I don't
Speaker 1: think one should necessarily look at what happens to the
Speaker 1: pound against the dollar and come to any great conclusions,
Speaker 1: because that's more to do with what's happening in the US.
Speaker 1: I wonder how much you think Brexit contributed to a
Speaker 1: tight labor market and therefore putting pressure on a lot
Speaker 1: of wages. I don't think that there was a huge
Speaker 1: amount of support in the city for Brexit. I think
Speaker 1: the city looks always at its competitive position, and you
Speaker 1: don't want to damage your competitive position if you can
Speaker 1: avoid it. But the fact is, you know that happened
Speaker 1: in sixteen. You know, we've we've moved on. What we
Speaker 1: do need to do now is work together to make
Speaker 1: sure that we can take advantage of regulatory freedoms so
Speaker 1: that I think the problem that we have at the
Speaker 1: moment is, you know, we had the Brexit was always
Speaker 1: going to have, you know, some negatives, but we always
Speaker 1: hope that there would be some positives as well. We've
Speaker 1: taken the negatives, we haven't we haven't captured the positives yet,
Speaker 1: so we've The announcements on solvency tore at the autumn
Speaker 1: Statement were the first signs of that and very welcome.
Speaker 1: They were too. How do you just sorry? I talk
Speaker 1: often about solvency too, but we don't want to borre
Speaker 1: everyone who's listening. Although it's extremely important. What was positive
Speaker 1: in that that it didn't make you think that the
Speaker 1: chancer understood some some of the pitfalls of what the
Speaker 1: financial services are dealing with. Oh yeah, absolutely, and and
Speaker 1: again you know, to have a prime minister who worked
Speaker 1: for an American investment bank and a hedge fund means
Speaker 1: that you can have detailed conversations about technical things which
Speaker 1: are completely understood. And I would actually also take this
Speaker 1: opportunity to pay tribute to John Glenn when he was
Speaker 1: City Minister and Economic Secretary to the Treasury, who worked
Speaker 1: tirelessly in getting to know about these issues and worked
Speaker 1: very very well with the Treasury, particularly Gwyneth Nurse who
Speaker 1: is now Director General Financial Institutions in the Treasury. That
Speaker 1: they should take a huge amount of credit for where
Speaker 1: we are. And you know, and well done to Andrew
Speaker 1: Griffith for you know, grabbing the battle on running with it.
Speaker 1: And it's very good for the city to know that that.
Speaker 1: Now John Glenn is back as Chief Secretary to the Treasury,
Speaker 1: so I I feel that we've got good, you know,
Speaker 1: people who are very knowledgeable in important positions so that
Speaker 1: we can have these conversations. There was talk about ministers
Speaker 1: being able to overrule some of the regulation specific cases,
Speaker 1: and I still can't figure out whether that's good or bad,
Speaker 1: because it does if you have a rule of law
Speaker 1: and regulation here in the UK is gold a standard.
Speaker 1: Does it hurt their regulation? So does it actually take
Speaker 1: away business? Yeah? I think you're you're you're talking about
Speaker 1: the call in power that was being considered. The city
Speaker 1: was not supportive of that for the simple reason you
Speaker 1: you've sort of pointed to it with your question, which
Speaker 1: is that when you get political interference with due processes
Speaker 1: of the regulator, you're inevitably going to get inconsistencies in
Speaker 1: the way that that's used, and so you'll get more volatility.
Speaker 1: And that's not what businesses want. We want a strong
Speaker 1: regulatory regime, which we've got. We've got an absolutely excellent
Speaker 1: chief executive of the p r A in the form
Speaker 1: of Sam Words, and an excellent chief executive of the
Speaker 1: f c A and in the form of Nicol Ratti.
Speaker 1: They have very difficult jobs to do um but they
Speaker 1: do it extremely well. And it's it's very important for
Speaker 1: us as a global financial center to have the reputation
Speaker 1: of strong regulation and strong regulators. I would much rather
Speaker 1: as a business, as a city business, or as a
Speaker 1: city lord mayor deal with the chief executive of the
Speaker 1: p r a then a politician, what do you think
Speaker 1: will be most frustrating for you when you look at
Speaker 1: some of the regulation And I know you're very positive
Speaker 1: about the future of the City of London, it's place
Speaker 1: in the world, and how it contract capital and talent
Speaker 1: if you had a magic wand is there something that
Speaker 1: you would change today? Yeah, because and this comes to
Speaker 1: the sort of the third piece of what I wanted
Speaker 1: to accomplish in the course of my mayorty that the
Speaker 1: theme of my majority is financing our future and the
Speaker 1: components of that are psalms to reform. So I put
Speaker 1: a big tick in the box there. I can't can't
Speaker 1: take any credit myself happen in week one. The second
Speaker 1: is green and sustainable finance, where London has a huge
Speaker 1: role to play in that global debate. But the third
Speaker 1: really important area is the growth economy. And this is
Speaker 1: this is the area that I you know that the
Speaker 1: moment is of immense frustration to me and where I
Speaker 1: would really want to see great change. We have got
Speaker 1: and we have had for decades, you know, great entrepreneurs
Speaker 1: building great early stage businesses. In that we've got four
Speaker 1: of the best ten universities in the world. Seven of
Speaker 1: the best twenty universities in the world. We've got good
Speaker 1: venture capital that goes into those universities, but we don't
Speaker 1: have the depth of capital markets to provide the accelerator
Speaker 1: funding for this. So time and time again, sophisticated international
Speaker 1: investors have come in and provided that capital and indeed
Speaker 1: some expertise, and then these businesses get sold internationally or
Speaker 1: they list on US exchanges and about fifty of the
Speaker 1: capital that comes in to invest in these businesses comes
Speaker 1: from North America. So this is this is the area
Speaker 1: which we've really got to address. How do you fix it?
Speaker 1: When you fix it? And there have been a lot
Speaker 1: of reviews of this, so the Jonathan Hill Lord Hill
Speaker 1: did his Hill review, ron Khalifa did his Khalifa Review.
Speaker 1: Now with Mark Austin from fresh Fields has done a
Speaker 1: secondary listing review. These are all extremely important parts of
Speaker 1: the jigsaw. Now, under the leadership of Julie Hoggett, who
Speaker 1: is the Chief Executive of the London Stock Exchange, we
Speaker 1: have the Capital Markets Industry Task Force looking to identify
Speaker 1: the regulatory and the statutory changes that need to be
Speaker 1: made and also the practice changes in on the listing
Speaker 1: rules side. So that we get rid of those those
Speaker 1: obstacles and what we need to be able to do,
Speaker 1: and this I believe really really strongly, is that we
Speaker 1: need to be able to mobilize the DC pensions to
Speaker 1: find contribution pensions and to get them to invest in
Speaker 1: this asset class. They don't have to invest much, sort
Speaker 1: of five percent of funds, but that would make a
Speaker 1: huge difference. Lord Mayor, if you were to give the
Speaker 1: City of London report card, what grade would you give
Speaker 1: it today and and what grade would you give it
Speaker 1: in in hopefully at the end of your tenure in
Speaker 1: twelve months, I would say that the City of London
Speaker 1: today isn't eight out of ten out of ten, not bad,
Speaker 1: and I want to get it to a nine because
Speaker 1: we're never going to be perfect almost perfect, Lord Mayor,
Speaker 1: thank you so much. You're very welcome. Thanks for listening
Speaker 1: to this week's in the City. We will be back
Speaker 1: next week, but in the meantime, if you like our show,
Speaker 1: please head on over to Apple Podcasts or wherever you
Speaker 1: listen to podcasts and rate, review and subscribe. This episode
Speaker 1: was hosted by me David Merritt and me Franci Laqua
Speaker 1: and it was produced by Summersati editing and sound designed
Speaker 1: by Blake Maples. Special thanks to Catherine Griffi's and Lord
Speaker 1: Mayor Necklace Lions