{"id":34779,"date":"2013-11-14T14:47:50","date_gmt":"2013-11-14T14:47:50","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=5818498cf7b192b109c13da36ac0b429"},"modified":"2013-11-14T14:47:50","modified_gmt":"2013-11-14T14:47:50","slug":"speech-uk-as-a-global-financial-centre","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=34779","title":{"rendered":"Speech: UK as a global financial centre"},"content":{"rendered":"
\n

I\u2019m very glad to be here this morning.<\/p>\n

Now \u2013 this might sound like an insult to the organisers.<\/p>\n

Which isn\u2019t how I usually begin a speech!<\/p>\n

But the issue I\u2019ve been asked to discuss this morning.<\/p>\n

Is \u2013 in fact \u2013 the issue I\u2019ve been asked to discuss most often since becoming a Minister.<\/p>\n

Namely; \u2018London\u2019s Future as the World\u2019s Financial Centre\u2019.<\/p>\n

Or \u2018How can London maintain its position as the World\u2019s Financial Centre?\u2019<\/p>\n

Now you might think I\u2019d be annoyed that I constantly have to address this question.<\/p>\n

And that people and events all over the City seem to be discussing the exact same issue every few months!<\/p>\n

But \u2013 in fact \u2013 I feel the opposite.<\/p>\n

Because unless \u2013 as a city \u2013 London keeps asking itself that question.<\/p>\n

Unless we keep assessing why this city is so successful.<\/p>\n

And what can keep it successful.<\/p>\n

Then we won\u2019t achieve our aims.<\/p>\n

Now, I won\u2019t admit to being a big sports fan.<\/p>\n

My newspaper of choice \u2013 as I\u2019m sure is the case for many people in the room \u2013 has been the FT for a while.<\/p>\n

Not best known for its sports coverage.<\/p>\n

But I remember seeing a quote from Jose Mourinho \u2013 the Chelsea manager \u2013the other day which said,<\/p>\n

\n

When you win a lot, you cannot forget why you win [\u2026]<\/p>\n<\/blockquote>\n

\n

If you think like that, you\u2019re in trouble.<\/p>\n<\/blockquote>\n

And that sentiment is absolutely true of this City.<\/p>\n

We cannot forget why we\u2019ve been successful.<\/p>\n

And we need to keep on making changes.<\/p>\n

Where changes need to be made.<\/p>\n

So that we can remain successful.<\/p>\n

As you just heard in the introduction<\/p>\n

Before becoming an MP I worked in the banking industry for 20 years.<\/p>\n

For both Chase Manhattan and Deutsche Bank.<\/p>\n

So first: I know just how much this city has to offer as a centre for this sector:<\/p>\n

    \n
  • our location<\/li>\n
  • our concentration of financial institutions<\/li>\n
  • our tradition of welcoming foreign firms and investors<\/li>\n
  • our very well respected legal system<\/li>\n<\/ul>\n

    And second \u2013 as someone \u2013 who has since moved into politics.<\/p>\n

    I recognise the contribution that this sector makes to the entire economy.<\/p>\n

      \n
    • It employs more than 2 million people throughout the UK, in Edinburgh, Manchester, Glasgow, Birmingham\u2026 and, of course, London.<\/li>\n
    • It brings in over 10% of the government\u2019s taxes each and every year.<\/li>\n<\/ul>\n

      And as our country moves from rescue to recovery.<\/p>\n

      The sector will not only provide real growth itself.<\/p>\n

      It will also provide the access to funding our businesses need to drive the economy forward.<\/p>\n

      So this is a sector I want to see perform well.<\/p>\n

      And this is a city I want to see remain a global leader.<\/p>\n

      But I know that maintaining this position won\u2019t be easy.<\/p>\n

      We mustn\u2019t forget why we win, as our friend Jose said.<\/p>\n

      And we need to keep adapting to global trends, social changes, and international developments if we want to maintain our position.<\/p>\n

      Lessons learned from the past<\/h2>\n

      Of course, there has been no greater threat to this city \u2013 and this sector \u2013 than the recent financial crisis.<\/p>\n

      The public reaction to those events was one of deep suspicion, and often \u2013 if we\u2019re completely honest \u2013 deep mistrust of anyone associated with financial industries.<\/p>\n

      In fact, I sometimes joke that.<\/p>\n

      When I arrived for my first day as an MP three years ago \u2013 after twenty years in banking \u2013 I had a unique sensation\u2026<\/p>\n

      \u2026a sensation that I don\u2019t think any other member of the intake shared.<\/p>\n

      That I was moving into a more popular profession!<\/p>\n

      But it\u2019s true that, as well as highlighting some very poor individual and commercial decisions.<\/p>\n

      The financial crisis also highlighted mistakes made by policymakers, politicians and regulators, both domestically and abroad.<\/p>\n

      So when my Party came to power, one of the first things we had to do was change financial regulation.<\/p>\n

      Not only to help rebuild the trust between the sector and the public.<\/p>\n

      But also to ensure that we wouldn\u2019t see a repeat of that financial crisis.<\/p>\n

      The Financial Services Act \u2013 which was the vehicle for that change \u2013 placed responsibility for financial stability back with the Bank of England.<\/p>\n

      It created a new prudential regulator \u2013 the PRA;<\/p>\n

      And it also created the Financial Policy Committee and the Financial Conduct Authority.<\/p>\n

      These are reforms that will deliver more effective regulation.<\/p>\n

      Reforms that will make our sector:<\/p>\n

        \n
      • more stable<\/li>\n
      • more resilient<\/li>\n
      • more efficient<\/li>\n<\/ul>\n

        And reforms that will be central to maintaining the attractiveness of this city \u2013 and the UK as a whole \u2013 as a global financial centre.<\/p>\n

        Our other big \u2013 post crisis \u2013 project, has been to improve bank resolvability.<\/p>\n

        A central part of which will be the ring-fencing of retail from investment banking.<\/p>\n

        Now, I know that this project has some detractors.<\/p>\n

        Some of whom will no doubt be in this room.<\/p>\n

        But it will protect retail banking services \u2013 whose continuity is essential to our economy \u2013 from global financial shocks.<\/p>\n

        And it will make UK banks easier to resolve if they get into financial difficulties.<\/p>\n

        In short, we\u2019re learning from the lessons of the past decade.<\/p>\n

        And we\u2019re making sure that we create a country \u2013 and of course, a city \u2013 in which our citizens can trust that their money is secure.<\/p>\n

        And in which our financial sector can flourish.<\/p>\n

        Bringing benefits to the entire UK economy. <\/p>\n

        But the action of the government alone won\u2019t be enough. <\/p>\n

        Industry \u2013 like you \u2013 need to take the lead. <\/p>\n

        You\u2019ll have to demonstrate high standards of conduct to win back the public trust and the international repute that was lost during not only the crisis.<\/p>\n

        But subsequent events like the Libor scandal. <\/p>\n

        And you will also have to oversee more lending (especially to SMEs).<\/p>\n

        And demonstrate more innovation. <\/p>\n

        These will be crucial in showing the UK public that a successful financial sector isn\u2019t just good for those that work within it.<\/p>\n

        As people \u2013 understandably \u2013 think.<\/p>\n

        But that it\u2019s good for households and businesses the length and breadth of the UK.<\/p>\n

        Things for the future<\/h2>\n

        But as well as learning from \u2013 and correcting \u2013 the mistakes of the past\u2026<\/p>\n

        We also have to look towards the future.<\/p>\n

        And I\u2019d like to spend the rest of my time exploring what we \u2013 as government \u2013 are doing to help\u2013 the sector \u2013 adapt to the changing world\u2026<\/p>\n

        Firstly \u2013 and most importantly \u2013 in an increasingly international business environment, we need to be at the forefront of global discussions.<\/p>\n

        We have to be a strong voice in international fora, such as the G20 and the Financial Stability Board.<\/p>\n

        And in the last five years, we\u2019ve shown real leadership here, playing a central role in reforms like Basel 3, and changes to OTC derivatives.<\/p>\n

        We have to be a strong voice in Europe too.<\/p>\n

        Making sure that the EU focuses relentlessly on the single market.<\/p>\n

        And on creating a stronger, more competitive economy for the continent.<\/p>\n

        Our position on financial services within the EU has always been clear.<\/p>\n

        We expect the Single Market and the freedoms set out in the EU Treaty to be upheld, and exercised in a non-discriminatory way.<\/p>\n

        And we\u2019ve stood up for the sector on many occasions.<\/p>\n

        We\u2019ve launched a legal challenge in the European Court against the ECB\u2019s location policy.<\/p>\n

        We\u2019ve taken a challenge to the ECJ over the Financial Transactions Tax proposals.<\/p>\n

        And we\u2019re also pushing back on the idea of harmonised EU rules on third countries.<\/p>\n

        These aren\u2019t pieces of political posturing.<\/p>\n

        Or arguments for arguments\u2019 sake.<\/p>\n

        They are examples of the UK taking a stand where we see EU regulation at its worst.<\/p>\n

        Acting as a hindrance \u2013 rather than a help \u2013 to the European economy.<\/p>\n

        Of course \u2013 at its best \u2013 the EU can provide incredible trading opportunities for its members.<\/p>\n

        And the launch of the free trade agreement between the EU and the US is a once in a generation opportunity.<\/p>\n

        As part of that agreement, we\u2019ve been very clear that we want to see further integration and trade between the world\u2019s two largest financial centres.<\/p>\n

        And we\u2019re working hard to make sure the agreement has financial services at its core.<\/p>\n

        But while every so often we need to flex our muscles internationally, when we believe barriers are being created.<\/p>\n

        We also need to open our arms internationally, when we believe opportunities are arising.<\/p>\n

        And that \u2013 being open to new developments and new opportunities \u2013 is the second important factor in securing this city\u2019s future.<\/p>\n

        It\u2019s for this reason that we created the Financial Services Trade and Investment Board.<\/p>\n

        Which will work closely with industry and the City to identify, agree and pursue high value trade and investment priorities.<\/p>\n

        I think it\u2019s crucial that we open up the city to new export markets.<\/p>\n

        And that we look to benefit from the opportunities that emerging economies create. <\/p>\n

        During my time as a banker I specialised in emerging markets, nobody needs to tell me about the opportunities that are out there.<\/p>\n

        And one way in which we\u2019re doing this, is by working to develop London as the western hub for RMB.<\/p>\n

        I was at the 3rd Annual Conference on the future of the RMB in global markets just this Tuesday.<\/p>\n

        And it was clear to me then, that there are real economic gains to be realised by corporates if they use RMB products and denominate their trade with China in RMB.<\/p>\n

        London is already responsible for more than 60% of RMB trading outside of Greater China. And I want to see London play an even greater role in the internationalisation of the RMB.<\/p>\n

        We\u2019re also incredibly keen \u2013 as most of you will know \u2013 to promote the UK as the western centre for Islamic finance.<\/p>\n

        When the World Islamic Economic Forum was held here in London two weeks ago.<\/p>\n

        It was the first time that the Forum has ever been hosted outside the Islamic world \u2013 <\/p>\n

        And the event was a huge success. <\/p>\n

        There were 16 heads of state or government in attendance \u2013 <\/p>\n

        There were 46 government ministers \u2013 <\/p>\n

        And nearly 3,000 registered delegates from 128 countries.<\/p>\n

        And to show just how serious the UK is about engaging with the Islamic world \u2013 <\/p>\n

        Our Prime Minister announced that the UK wants to be the first Western country to issue a sovereign Islamic bond.<\/p>\n

        So we are opening our country up to opportunities internationally.<\/p>\n

        But we must also.<\/p>\n

        And this is the third \u2013 and final \u2013 area I\u2019d like to discuss this morning.<\/p>\n

        We must also be prepared to look at the work going on here in the UK.<\/p>\n

        Recognise \u2013 and be proud of \u2013 the areas where we already excel.<\/p>\n

        And make the changes we need to make domestically to ensure that we continue to excel in this area.<\/p>\n

        One of those sectors where we recognise our world-leading status is in Asset Management .<\/p>\n

        So back at the Budget this May, we introduced an Asset Management action plan, to enable the sector to go from strength to strength.<\/p>\n

        The headline measure \u2013 if you will \u2013 was the abolition of Schedule 19 stamp duty reserve tax.<\/p>\n

        Schedule 19 \u2013 for anyone who doesn\u2019t know \u2013 is a special stamp duty reserve tax currently applied to UK collective investment schemes, which industry identified as a major deterrent to locating funds in the UK.<\/p>\n

        So we listened, we took action, and the tax will be abolished.<\/p>\n

        Although the rest of Europe is looking at new ways to tax financial transactions, we are busy abolishing this.<\/p>\n

        The plan also included ambitious plans on reforming regulation.<\/p>\n

        Increasing marketing of our sector abroad.<\/p>\n

        And because that strategy was so well received.<\/p>\n

        And because our actions are already helping to attract more asset management activity for the UK\u2026<\/p>\n

        We\u2019ve launched a similar growth action plan for our insurance sector.<\/p>\n

        All being well \u2013 you should be hearing a lot more about that plan over the coming weeks.<\/p>\n

        Strong advocate of city<\/h2>\n

        I want to be a strong advocate of this city.<\/p>\n

        I want the Treasury as a whole to be strong advocates of this city.<\/p>\n

        And \u2013 I hope \u2013 the actions I\u2019ve laid out to you this morning have shown how committed we are to maintaining its success.<\/p>\n

        Not only through fixing the mistakes of the past.<\/p>\n

        By introducing a more stable and resilient banking sector.<\/p>\n

        But also by preparing you for success in the future.<\/p>\n

          \n
        • standing ground during global economic discussions<\/li>\n
        • creating opportunities at home and abroad<\/li>\n
        • and recognising \u2013 and promoting \u2013 the areas where you can be global leaders<\/li>\n<\/ul>\n

          Of course, we can only set the framework for your industry to succeed.<\/p>\n

          And you\u2019ve got to put in the hard hours to make it work.<\/p>\n

          I\u2019m sure you will.<\/p>\n

          Because the thing I always say about the financial sector.<\/p>\n

          The thing I found during my two decades in the industry.<\/p>\n

          Is that this isn\u2019t a sector that that judges you by your surname or your colour or your religion.<\/p>\n

          It\u2019s a sector that judges you by the hard work you put in.<\/p>\n

          I want to continue working hard \u2013 with you \u2013 to maintain our position as a world leader.<\/p>\n

          And I very much expect \u2013 and look forward to \u2013 more invitations to events just like this.<\/p>\n

          And to discuss this exact issue.<\/p>\n

          Let\u2019s keep asking ourselves why we succeed now.<\/p>\n

          Let\u2019s keep asking ourselves what we can do to succeed in the future.<\/p>\n

          And I\u2019m sure that if we do.<\/p>\n

          We\u2019ll keep hold of our position as the global financial centre.<\/p>\n

          Thanks for listening.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

          Financial Secretary to the Treasury, Sajid Javid on the UK’s future as a global financial centre.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/34779"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34779"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/34779\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34779"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34779"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34779"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}