The latest edition of Total Politics includes a feature piece about Sharon Bowles, Liberal Democrat MEP and chair of the European Parliament’s Economic and Monetary Affairs Committee:
The Lib Dem MEP is a hugely powerful and yet virtually unknown British politician. She has had far more impact on our legislation than your average Westminster politician…
Although she claims to be “in favour of a healthy, vibrant City,” Bowles uses uncompromising language for bankers. She does not have much time for complaints about traders moving their businesses to other, less tightly-regulated locations. “I don’t actually believe there are only one or two great traders. There are a handful of people in the right place at the right time. There are plenty more intelligent people that could equally do the job and it’s about time that they woke up and smelt the coffee instead of perpetuating this notion that the talent will go. If they want to go and play poker with the Swiss, or go to Abu Dhabi then so be it. But they may find they don’t like it as much as living in London.”
You can read the full piece here.
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6 Comments
What a stupid comment.
It’s not about one or two traders. It’s about one or two businesses. If they start moving out due to some stupid EU regulation then it will hit the economy.
You don’t need to be an MEP to work that one out.
What a fantastically stupid comment. If trading skills were common banks and hedge funds would not pay a premium for them. Does she have any evidence at all for this nonsense?
The effect of extending the bonus rules to hedge funds (who had nothing to do with the crash) will be to drive them out of London. Why on earth would anyone run a hedge fund from London with these restrictions (and 50% income tax as well) when they could move to Zurich,Bermuda or New York?
The UK has few enough world class industries, one of them is financial services – banking, asset management and insurance all based in the City. They generate jobs and billions of pounds in taxes.
To put this as risk so as to be able to make a few cheap points as disgraceful.
Canada was one of the few country that properly regulated its banks, and that’s why it wasn’t hit by the credit crunch. I suspect that traders need London as much as London needs them. She’s not punishing companies that achieve genuine stable success, only those that make reckless moves and then claim big bonuses and pensions when business collapses around them.
@Daniel, it doesn’t matter very much where the trader is. They need a screen. When a hedge fund collapses the investors lose money. Why punish them with these bonus rules?
As someone who worked as a trader for nearly 20years I have to say I entirely agree with Sharon. Good Traders are not unique, however there are some who are quite outstanding. What makes an outstanding Trader, frequently the Company he works for, is it big enough to allow him to take risks and is the management astute enough to recognise the risks. I remember too well what happened with Barings, Management did not recognise or understand what their ‘Star’ trader was doing they were dazzled by the apparent profits he was making. Too often I am afraid, we have heard that ‘Rogue Traders’ have lost their companies vast sums of money. Regulation is vital and the pursuit of bonuses is dangerous.
As for Stephen’s comment, we have heard for years that Financial Services will move from London to some other more more advantageous or less regulated environment, Frankfurt, Paris, Singapore, Hongkong and New York were all competing with London for the pre-eminent position. None have truly suceeded in overtaking London, not even New York. London has the infrastructure the experience and incidentally is in an ideal Time Zone. New York will be regulated as tightly as any country in Europe so any competitive advantage will disappear. I believe that playing fast and loose in the Financial markets should be a thing of the past, surely we have learnt our lessons.
The collapse of the financial markets was due to light touch regulation, which Gordan Brown admits was lobbied for by the financial sector.
Having seen the consequences of how markets bubble in these circumstances, if financial institutions still want locate in countries that have minimal regulations, then good luck to them. Although why anyone would want to be one of their shareholders is beyond my comprehension. Still there are plenty of rich libertarians around, maybe they should invest in them and practice what they preach.