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New report shows erosion in the UK’s attractiveness as an international banking centre
A new BBA report “Winning the Global Race” today outlines key threats to the competitiveness of the UK as a centre for wholesale banking. Produced in conjunction with consultancy Oliver Wyman, the research shows that urgent action is needed if the UK is to remain an attractive location for foreign banks and provide a competitive business environment for UK wholesale banks to challenge overseas.
The report recognises the Government’s “new settlement” and raised ambition to “ensure we have the best and most competitive financial services in the world” outlined in the Chancellor’s Mansion House speech on 10th June 2015, and positive policy announcements since. Nonetheless, significant challenges remain and the report proposes a number of recommendations for the industry, regulators and government.
It also highlights a number of worrying trends:
The report also underlines the significant contribution that the industry makes to the UK:
Anthony Browne, BBA Chief Executive, said:
“We have now reached a watershed moment in Britain’s competitiveness as an international banking centre. The balance of push and pull factors, including tax and capital treatment, unilateral and extraterritorial regulation and overall uncertainty, are weighing heavily in boardrooms across the industry. Many international banks have been moving jobs overseas or deciding not to invest in the UK.
“Our report today shows we cannot be complacent. Wholesale banking is an internationally mobile industry and there is a real risk this decline could accelerate. We have to act now together with regulators and government to maintain the UK’s leading position in the global competitiveness race and deliver the ‘new settlement’ outlined by the Chancellor in his Mansion House speech.
“Today we are setting out a joint plan of action for industry, regulators and the Government to tackle together the local and global threats to our competitiveness. Taking action now will secure the UK’s position and maintain the considerable contribution that international wholesale banking makes to the British economy.”
Sir Hector Sants, Vice-Chair at Oliver Wyman, who led the review, said:
“I and my colleagues at Oliver Wyman are delighted to have been able to support the BBA in the development of this important report which has identified actionable recommendations for the banking industry and government.”
The report sets out a total of 23 recommendations, including the following:
Notes to editors
For more information please call the BBA press office on 020 7216 8989 or email email@example.com
The BBA Report ‘“Winning the Global Race: The competitiveness of the UK as a centre for international banking” can be accessed via the download below.
Eight threats to international banking in the UK are:
1) Declining profits in wholesale business globally
2) Unilateral regulation
3) Extraterritorial regulation
4) “Wimbledonisation” (the loss of UK based, global systemically important banks, GSIBs)
5) Tax uncertainty
6) Continuing to benefit from the Single Market
7) Attracting and retaining global talent
8) The growth in viable competing international banking centres
The BBA Report “Winning the Global Race” sets out a total of 23 recommendations for action under five over-arching themes:
1) A coherent national vision for the role of international banking as part of the UK economy, and joined up government around this
2) A sound global regulatory framework backed by consistent principles, rules and standards
3) Predictable and proportionate application of an effective regulatory framework, aligned to UK policy objectives
4) Promotion of the UK as a centre for highly skilled banking employees and a driver of employment across the nation
5) Support for growth and innovation