New York and Singapore best menace to the town after Brexit
Jes Staley, CEO of Barclays, attends the Yahoo Finance All Markets Summit in Union West in New York on Thursday, October 10, 2019. Photo: Evan Agostini / Invision / AP
Barclays executive director (BARC.L) said the government should focus on New York and Singapore rather than Europe as the UK wants to maintain its competitive advantage in the financial arena after Brexit.
Jes Staley told the BBC in an interview on Friday: “What London has to focus on is not Frankfurt or Paris, but New York and Singapore.”
Staley’s comments come as Westminster plans a path for the UK economy after Brexit. There was talk of deregulation that could lead to a “Big Bang 2.0” for the city – an indication of the explosion in activity after deregulation in the 1980s.
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Staley said there is 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 security needed to do business in the UK.
As the latest example, Staley highlighted a recent move to legislate to buy now and pay later – called a “preventive” measure by the regulator. He said green finance could be another focus.
HSBC and Barclays headquarters in Canary Wharf, London. Photo: Tolga Akmen / AFP via Getty Images
“Today’s climate is like 1995 technology,” he said. “All the Amazons, the Googles, didn’t really exist in 1995 and now they rule 40% of the economy. I think it’s a fair argument that dealing with the climate and the environment is now in the same position.”
The battle for competitiveness takes place in the midst of a battle for access to the EU for financial and professional services. Britain officially left the EU on January 1st with a “lean” trade deal that did not cover services. The City and Westminster are now campaigning for “equivalence decisions” from Brussels that would allow investment banks in London to serve clients across the single market.
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Early data suggests that while euro-denominated equity trading has moved to trading venues in the EU, settlement of euro derivatives has moved to New York. London has traditionally dominated the multi-trillion euro derivatives market.
Mile Celic, executive director of industry group TheCityUK, told a House of Lords committee last month that New York would likely be a “big winner” of Brexit.
“There’s a logic to big financial services institutions, financial services activities that tend to focus on size and mass ranges – that kind of has this magnetic effect,” he said. “There are two major international financial centers in the world – one in London and the other in New York.”
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Catherine McGuinness, the political chairwoman of the City of London Corporation, told Yahoo Finance UK in a separate interview on Friday that EU leaders should consider whether to undermine us and see business go to New York or Singapore goes.
Staley admitted 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 positive than negative”.
“Brexit gives the UK the opportunity to define its own agenda,” he told the BBC. “In defining this financial services agenda, the government here really should be focused on staying competitive with other markets, and I think that’s what they are focusing on.”
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