The City of London is at risk of losing its status as a global financial powerhouse within five years, according to a new report by TheCityUK.
The lobbying group worked with 60 financial services groups to set out international strategy proposals to return the UK’s financial capital to being the “world’s leading financial centre” by 2026.
Despite retaining its edge as the leading European financial centre post-Brexit, the UK has lost global market share in areas such as cross-border bank lending, pension and hedge fund assets and insurance premium-writing.
“One of the greatest risks for any successful financial centre is complacency,” said Miles Celic, chief executive officer of TheCityUK. “Europe is littered with cities that were once the leading international centre of their day. “
He added, “The last decade has been one of growth for our industry, yet global competitors have grown faster. However, with the right strategy in place and a clear focus on delivery, the UK can pull away once again from its competitors. It is an ambition that needs industry, government, and regulators to work together. It will take sustained focus, cooperation and determination.” “
The UK government is intent on financial services continuing to be a strong contender and believes the lack of equivalence between the UK and EU could give the industry greater freedom in shaping its own destiny.
Chancellor Rishi Sunak has proposed changes to rules governing stock market listings, stock, bond and commodity trading and insurance. The Treasury’s also issued a hefty 72-page consultation on UK wholesale markets with MiFID in its sights.
TheCityUK said ministers must ensure these proposed changes were carried through, including allowing dual ownership share structures to draw more international initial public offerings and changing listing rules to encourage more alternative assets in UK markets.
The report also highlighted other areas that the UK can take the lead such as fintech and data. It called for the creation of a global hub for data and technology by championing common ground rules for digital trade and seek targeted data transfer agreements.
In addition, it believes the UK could become a centre of global environmental, social and governance (ESG) markets and suggests partnering with other countries to create global ESG disclosure standards and more interoperability of
As many of these segments require highly skilled workers, it recommends making work visas easier to obtain and to implement a new flexible work system which enables international staff to transfer for up to six months without a visa to their employer’s home country.
It also said ministers needed to secure international recognition for UK qualifications.
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