The pound in your pocket…
Having written a report on the Financial Services Authority nearly two years ago, it is good to know how committed the FSA has become to principles-based regulation. There has been progress, most recently recognised by the Association of British Insurers. Given the supreme importance of the financial services industry to the British economy, it is vital that it thrives and prospers.
It is interesting how the public understands its importance. For example, NASDAQ, based in New York, is trying to buy our Stock Exchange. It would only be a source of concern to most if that involved our having to be subject to US regulation. Given the mobility of the industry, financial businesses are moving to London, and away from New York. The US regulatory environment is regarded as oppressive. The US Treasury Secretary has warned of its consequences.
Isn’t it ironic that the United States, a beacon of free enterprise, has gone down a regulatory route which is demonstrably backfiring? We are the beneficiaries, but let us not be complacent. Soon the level of sophistication in a city like Shanghai may begin to look compellingly attractive. And so much Brussels-think is wedded to a social model increasingly irrelevant in our globalised market place.
We need to remain very much on our guard. In the meanwhile, what is America’s loss is our gain.