Democracy is an illusion! It’s become a political system fostered by the élite, for the élite, in order to fool the people that they have a stake in the system. In actual fact, they have virtually none. The whole political system in the modern era, despite having noble beginnings, is now used to benefit the few at the expense of the many. – Mark Alexander, June 29, 2018
THE TELEGRAPH: Square Mile bosses call for more government action to boost pension funds’ investing
Julia Hoggett, chief executive of London Stock Exchange, called for more to be done to address the pay gap between UK and US execs CREDIT: Hollie Adams/Bloomberg
Low executive pay is the biggest obstacle to boosting the City of London, FTSE bosses have said.
A new survey of 150 directors at London-listed companies found that lower pay for City chiefs compared to rival financial centres was holding back the London Stock Exchange (LSE) as a listing venue.
The research, carried out by investment bank Numis, adds to growing complaints in the Square Mile that Britain is being held back by a campaign against high pay.
Julia Hoggett, chief executive of the LSE, has said a pay disparity between UK chief executives versus their US counterparts has “not received enough attention” and called for a level playing field to stem an exodus of companies.
Chief executives of S&P 500 companies in the US make on average $10m more than FTSE 100 counterparts, according to data from Equilar and Deloitte published earlier this year. » | Simon Foy | Tuesday, July 25, 2023
THE GUARDIAN: Battle focuses on what EU sees as bloc’s over-reliance on London’s clearing houses handling euro-denominated derivatives
The City of London faces another post-Brexit blow to its dominance after the EU moved to require firms to settle more financial-risk reducing trades within the bloc.
The plan centres on trades in securities known as derivatives, and on financial market clearing houses, the intermediaries that enable the transfer of funds to sellers and financial products to buyers. Handling trillions of transactions each year, they are deemed an essential part of financial market plumbing that reduces risk.
Since Britain voted to leave the EU in 2016, the subject has become a battleground, as Brussels seeks to end what it sees as an over-reliance of European firms on London for euro-denominated derivatives trades. » | Jennifer Rankin in Brussels | Wednesday, December 7, 2022
Oct 31, 2022 | In this latest Federal Trust video, the financial analyst Graham Bishop and the Chairman of the Trust, John Stevens, discuss the likelihood and the significance of the City of London losing its approximately €100 trillion Euro derivatives clearing business to the Eurozone by 2025. Among other implications, the loss of its status as the main Euro clearing centre might also put in jeopardy its role as the leading global US Dollar hub.
Guest:
Graham Bishop is an independent consultant on European political, financial, economic and budgetary integration as well as the founder of grahambishop.com. He is also a member of the Council of the Federal Trust and, he says, a 'dedicated Europhile'. He has been a fixture in the City since 1972, beginning with Phillips & Drew and ending with Citi where he was a European bond analyst. Adviser to the Co-Chief Executives in Europe on European Financial Affairs.
THE NEW YORK TIMES: In 1969, two years after the Cayman Islands, a British territory, passed its first law to allow secretive offshore trusts, an official government report struck an ominous note. A tide of glossy propositions from private developers, it warned, was washing through the islands. Cayman was fast becoming a state captured by shady finance.
Those were the pungent beginnings of a modern system brought to light by the Pandora Papers, an enormous data leak coordinated by the International Consortium of Investigative Journalists. The papers exposed a smorgasbord of secretive and questionable financial dealings by more than 330 politicians and public officials from over 90 countries and territories — and over 130 billionaires from Russia, the United States and elsewhere. On display was a dizzying array of chicanery and wealth hoarding, often by the very people who should crack down on it.
The revelations, published on Oct. 3, are global in scope. But if there is one country at the system’s heart, it is Britain. Taken together with its partly controlled territories overseas, Britain is instrumental in the worldwide concealment of cash and assets. It is, as a member of the ruling Conservative Party said last week, “the money laundering capital of the world.” And the City of London, its gilded financial center, is at the system’s core.
For Britain, whose bloated financial sector exacerbates widespread economic problems, that’s bad enough. For the world, at the mercy of an economic system rigged for the rich, it’s even worse. » | Nicholas Shaxson | Monday, October 11, 2021
London to Lose Title of World's Finance Capital, Study Warns
THE GUARDIAN: Rival hubs such as New York and Hong Kong will push beleaguered City into third place by 2015, CEBR forecasts
London can expect to lose its crown as the leading global centre for high finance this year amid a barrage of City job cuts, falling bonuses and competition from rival hubs led by New York, Hong Kong and Singapore, according to a study.
By 2015 the explosion in jobs in Hong Kong will have pushed the Square Mile into third place on a league table of international financial centres, says the Centre for Economics and Business Research (CEBR).
The CEBR also had more immediate bad news for London's bankers, suggesting combined City bonus pools are likely to slip to £4.4bn this year, down from £6.75bn for 2011 and £11.56bn in 2008.
Such will be the rise in finance job numbers in the far east that London is expected to only narrowly employ more financial workers than Singapore, the region's number two financial centre, in three years' time, the CEBR predicts. » | Simon Bowers | Sunday, November 11, 2012
January 03, 2012
Bankers Ready to Sue If Bonuses Too Small
THE DAILY TELEGRAPH: A growing number of bankers are considering suing their employer if they do not get the bonus they think they deserve this year, according to City employment lawyers.
British banks should brace themselves for claims from "disgruntled" bankers who will not roll over and accept lower bonuses than usual despite the huge public and shareholder backlash against out-of-control pay, legal experts have warned.
One claim for £1.5m is understood to have already made its way into the system last year, after a banker believed their 2011 bonus was too low.
The case is believed to have been rejected before it got to court, with lawyers acting for the bank branding the claim "whimsical".
Judges are also said to be unsympathetic towards bankers' claims that their bonuses are too small in the current climate.
However, City lawyers said an increasing number of bankers were building cases in preparation of lower bonus payouts and were prepared to fight it out at court. Read on and comment » | Louisa Peacock, Jobs Editor | Monday, January 02, 2012
THE DAILY TELEGRAPH: The wave of City redundancies has prompted finance professionals to warn that several thousand investment banking industry jobs could be lost in the coming months.
BNP Paribas, Merrill Lynch and Nomura became the latest major banks to announce job cuts on Wednesday as falling revenues forced them to follow several rivals and shed staff.
"This is the beginning of a major structural shift and I think you will see a lot more cuts in the New Year," said Stéphane Rambosson, a former City banker and managing partner of executive search firm Veni Partners.
BNP Paribas said it would cut about 1,400 jobs in its investment banking division, which employs several thousand staff in London, while Bank of America Merrill Lynch (BoAML) has begun cutting broking employees, with about 15pc of roles at risk, according to two sources. » | Harry Wilson, and Anna White | Thursday, November 17, 2011
THE DAILY TELEGRAPH: An alleged rogue trader accused of the City’s biggest fraud is “sorry beyond words”, his lawyer said today.
Former public school boy Kweku Adoboli was “appalled” at the consequences of his “disastrous miscalculations”, said his barrister Patrick Gibbs QC.
Kweku Adoboli is said to have gambled away £1.5 billion while working for Swiss investment bank UBS.
The 31-year-old of Stepney, east London, who faces two charges of false accounting and two counts of fraud, appeared before City of London magistrates.
Mr Gibbs told the hearing: “He is sorry beyond words for what has happened here.
“He went to UBS and told them what he had done and stands appalled at the scale of the consequences of his disastrous miscalculations.”
Adoboli was remanded in custody to appear for a committal hearing on October 20. No plea was entered and there was no application for bail. » | John-Paul Ford Rojas | Thursday, September 22, 2011
February 05, 2011
London's Neediest Curse City Bonuses
September 10, 2010
EU Markets Chief Barnier Warns the City Casino Days Are Over
THE TELEGRAPH: The deceptively quiet Phoney War between Brussels and Anglo-Saxon finance is coming to an end. Life is about to change for hedge funds, commodity traders, and the 'prop desks' of global banks in the City of London.
Michel Barnier said the new European Single Market Authority will have sweeping powers to control derivatives. Photo: The Telegraph
"We want to know who is doing what with short-selling," said Michel Barnier, the European single market commissioner and the Frenchman in charge of the EU's new machinery of regulation.
"We need markets, and we need financial institutions that create value-added, but everyone has to be able to answer for what they are doing. People taking crazy risks linked to crazy rewards have to be brought back to their senses," he said, in a wide-ranging interview with The Daily Telegraph at the annual Ambrosetti conference on the shores of Lake Como.
Mr Barnier said the new European Single Market Authority (ESMA) endorsed in principle last week - along with EU banking and insurance watchdogs - will have sweeping powers to control derivatives.
"The EU authorities are going to look at every product. ESMA can restrict leverage, or in exceptional circumstances even ban a product altogether," he said. The Commission is introducing a text on derivatives next week as part of a new oversight machinery covering the gamut of finance and investment, including controls on private equity, hedge funds, as well as oil and currency trading.
Mr Barnier said there was no plan for a blanket ban on the short-selling of stocks or on the use of derivatives such as credit default swaps (CDS), famously exploited by funds to short Greek, Irish, Portuguese, Spanish bonds during Europe's debt crisis this year.
"It is not a question of prohibiting. Short-selling is useful, if used well, but we want to avoid abusive naked short-selling, and be able to take action in emergencies," he said. >>> Ambrose Evans-Pritchard in Como | Thursday, September 09, 2010
May 11, 2010
UK Credit Rating Set for Downgrade Under Lib-Lab Deal, City Analysts Warn
THE GUARDIAN: Lab-Lib government the least liked option by markets and would almost guarantee a downgrade of UK debt – BNP Paribas
Britain would most likely suffer an expensive and potentially damaging downgrade to its debt rating if the Liberal Democrats form a coalition with Labour, City analysts warned today amid ongoing uncertainty about the creation of a new government.
As the Institute of Directors called on political parties to focus on the economy rather than the need for electoral reform, analysts at BNP Paribas reckoned that a "Lab-Lib government is the least liked option by markets and would almost guarantee a downgrade of the UK sovereign [debt]".
The top-notch AAA debt rating that the UK currently holds ensures that the country achieves the most competitive rates when raising money on the financial markets. If the rating is cut then the country would be forced to pay more to borrow money - although it has a long way to fall before reaching the junk status assigned to Greece, the recipient of a €110bn (£94bn) bailout package from the International Monetary Fund and eurozone countries. >>> Jill Treanor | Tuesday, May 11, 2010
February 03, 2010
Banks Told to Comply on Bonuses or Lose UK Banking Licences in Shock FSA Ultimatum
THE TELEGRAPH: Investment banks have been told that every bonus issued must comply with the regulatory guidelines – or they face having their licences to operate in Britain revoked.
In an extraordinary ultimatum that has shocked some of the City's biggest companies, the Financial Services Authority (FSA) told bank bosses that 60pc of all pay must be deferred, with no exceptions, even for those whose contracts conflicting [sic] with the edict.
Many of the global players have in recent weeks made representations to the City watchdog, in particular about pre-existing employment contracts that guarantee bonuses over a year or more. But their appeals have been met with the FSA's toughest yet response.
One pay executive in a major bank told The Daily Telegraph: "The message came back that while the FSA agreed that it does not have jurisdiction over contractual law, it does have jurisdiction over issuing bank licences in London, and that we should go away and unwind the contracts."
Bankers at Merrill Lynch are among the first affected. Those with pre-existing contracts were told about the FSA's tough stance on Friday when their bonuses were agreed.
One Merrill Lynch employee said: "We thought that contracts would be immune from changes but were told by bosses that their hands were tied and there was nothing they could do, the regulator had put its foot down."
Banks that have not yet told staff about the bonus payouts are now scrambling to ensure that they are comply with the FSA rules.
Senior directors are concerned that the stance could result in the banks facing a series of legal challenges from individuals with pre-existing contracts. Headhunters say that banks including Barclays Capital and Nomura have lured star performers by offering them large guaranteed bonuses.
One headhunter said: "Many of these contracts have guarantees that 50pc of the bonus will be paid in cash. These are tricky things to unpick. But cleverly, the FSA has put the onus on the banks to unwind the contracts, rather than itself getting embroiled in a complex legal row." >>> Louise Armitstead and Helia Ebrahimi | Wednesday, February 03, 2010
December 03, 2009
La City redoute une régulation à la "française"
LE MONDE: Michel Barnier se serait bien passé de cette empoignade. Le prochain commissaire au marché intérieur craint de voir son début de mandat empoisonné par l'opposition entre le Royaume-Uni et la France au sujet de la régulation financière. Entre Paris et Londres, le ton est monté de plusieurs crans depuis la nomination du Français par le président de la Commission européenne, José Manuel Barroso, à un poste stratégique en ces temps de crise, puisqu'il chapeaute les services financiers.
Les Britanniques s'inquiètent du sort de la City de Londres, la principale place financière européenne. Ils ont tout fait pour empêcher M. Barroso de nommer à cette fonction une personnalité soucieuse de pousser les feux de la régulation. Ils n'ont ensuite pas apprécié que Nicolas Sarkozy présente leur pays, dans un commentaire accordé au Monde, comme le "grand perdant" de la récente répartition des postes bruxellois. Et jette ensuite de l'huile sur le feu en affirmant que ce sont "les idées françaises de régulation qui triomphent en Europe".
Cette "guéguerre" complique la formation des cabinets des commissaires, à Bruxelles. Déjà flanqué, à la demande du premier ministre britannique, Gordon Brown, d'un directeur général britannique, M.Barnier refuse de recruter un conseiller proche des intérêts de la City. Ce qui déplaît à Londres, lequel a fait pression sur Catherine Ashton, la toute nouvelle haute représentante de l'Union européenne pour la politique étrangère, afin qu'elle renonce à ce st.ade à recruter un Français dans son cabinet. >>> Philippe Ricard et Marc Roche | Jeudi 03 Décembre 2009
December 02, 2009
We Are in Charge Now, Sarkozy Tells the City
TIMES ONLINE: Alistair Darling has delivered a blunt warning to the EU’s new French finance chief against meddling with the City of London.
As Nicolas Sarkozy gloated over impending curbs on the City, the Chancellor said that such moves would drive financial services out of Europe.
The French President’s glee at the appointment of Michel Barnier as Commissioner for the Single Market took on an edge of menace yesterday when he said that unfettered City practices must end.
“Do you know what it means for me to see for the first time in 50 years a French European commissioner in charge of the internal market, including financial services, including the City [of London]?" he said yesterday.
"I want the world to see the victory of the European model, which has nothing to do with the excesses of financial capitalism," he said. >>> Francis Elliott, Suzy Jagger, Martin Waller and David Charter | Wednesday, December 02, 2009
THE SUNDAY TIMES: Number 85 Broad Street, a dull, rust-coloured office block in lower Manhattan, doesn’t look like a place to stop and stare, and that’s just the way the people who work there like it. The men and women who arrive in the watery dawn sunshine, dressed in Wall Street black, clutching black briefcases and BlackBerrys, are very, very private. They walk quickly from their black Lincoln town cars to the lobby, past, well, nothing, really. There’s no name plate on the building, no sign on the front desk and the armed policeman stationed outside isn’t saying who works there. There’s a good reason for the secrecy. Number 85 Broad Street, New York, NY 10004, is where the money is. All of it.
It’s the site of the best cash-making machine that global capitalism has ever produced, and, some say, a political force more powerful than governments. The people who work behind the brass-trim glass doors make more money than some countries do. They are the rainmakers’ rainmakers, the biggest swinging dicks in the financial jungle. Their assets total $1 trillion, their annual revenues run into the tens of billions, and their profits are in the billions, which they distribute liberally among themselves. Average pay this recessionary year for the 30,000 staff is expected to be a record $700,000. Top earners will get tens of millions, several hundred thousand times more than a cleaner at the firm. When they have finished getting "filthy rich by 40", as the company saying goes, these alpha dogs don’t put their feet up. They parachute into some of the most senior political posts in the US and beyond, prompting accusations that they "rule the world". Number 85 Broad Street is the home of Goldman Sachs.
The world’s most successful investment bank likes to hide behind the tidal wave of money that it generates and sends crashing over Manhattan, the City of London and most of the world’s other financial capitals. But now the dark knights of banking are being forced, blinking, into the cold light of day. The public, politicians and the press blame bankers’ reckless trading for the credit crunch and, as the most successful bank still standing, Goldman is their prime target. Here, politicians and commentators compete to denounce Goldman in ever more robust terms — "robber barons", "economic vandals", "vulture capitalists". Vince Cable, the Lib Dem Treasury spokesman, contrasts the bank’s recent record results — profits of $3.2 billion in the last quarter alone — and its planned bumper bonus payments with what has happened to ordinary people’s jobs and incomes in 2009.
It’s even worse in the US. There, Rolling Stone magazine ran a story that described Goldman as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money". In his latest documentary, Capitalism: A Love Story, Michael Moore drives up to 85 Broad Street in an armoured Brinks money van, leaps out carrying a sack with a giant dollar sign on it, looks up at the building and yells: "We’re here to get the money back for the American people!"
Goldman’s reputation is suddenly as toxic as the credit default swaps and other inexplicably exotic financial instruments it used to buy with glee. That’s bad for the one thing it values more than anything else: business. Being the prime target for popular and political outrage could put Goldman first in line for draconian new regulation. So it has, reluctantly, decided that the time has come to speak out, to fight its corner. That’s how, on one of those bright autumnal New York mornings when anything seems possible — even an invitation to break bread with the masters of the universe — I find myself walking past the security guard who held up Michael Moore and into the building with no name. I'm doing 'God's work'. Meet Mr Goldman Sachs >>> John Arlidge | Sunday, November 08, 2009
Michael Moore – Capitalism: A Love Story – Trailer
May 22, 2008
EU-Wide ‘Super Regulator’ Poses Threat to City of London
THE TELEGRAPH: A top cast of European statesmen has issued a blistering denunciation of financial markets and called for a creation of a pan-EU body to protect the citizens against the "social risk" posed by modern capitalism.
"The financial world has accumulated a massive amount of fictitious capital, with very little improvement for humanity," said the group in an open letter to the European Commission and the EU presidency.
"The current financial crisis is no accident. It was not, as some top people in finance and politics now claim, impossible to predict. For lucid individuals the bell rang years ago. This crisis is a failure of poorly or unregulated markets, and shows us, once more, that the financial market is not capable of self-regulation," it said, calling for the a new "European Crisis Committee" to take the matter in hand.
"Free markets cannot ignore social morals. Decent capitalism needs effective public policy. But when everything is for sale, social cohesion melts and the system breaks down," it said.
The letter is signed by former premiers and finance ministers from Europe's socialist bloc, including ex-German Chancellor Helmut Schmidt, France's Lionel Jospin and Michel Rocard, and former Commission chief Jacques Delors. While the initiative comes from the Left, it is in tune with the views of French president Nicolas Sarkozy and German Chancellor Angela Merkel.
Both have called for measures to clamp down on "speculation".
The fulminating text is the clearest evidence yet of the mounting drive for an EU-wide "super regulator", which would reduce Britain's Financial Services Authority to a regional branch - and pose a grave threat to the City of London. EU-Wide ‘Super Regulator’ Poses Threat to City of London >>> By Ambrose Evans-Pritchard | May 22, 2008
TIMES ONLINE: How does Sharia fit into the heated debate about the relationship between the British legal system and religious codes?
Here’s a thought. If all the sub-prime deals in the US had been governed by Sharia there would have been no massive defaults and the credit crunch would never have loomed over our shopping expeditions.
Instead, Islamic law’s requirements for prudent lending, the sharing of risk and a ban on the earning of interest would have insulated the borrowers and the world economy at large from the debacle of the past six months. And for that even the Archbishop of Canterbury’s harshest critics might have been a mite grateful.
So how does Islamic finance — now increasingly practised by law firms in London and New York — fit into the heated debate about the relationship between the British legal system and religious codes?
The Prime Minister in particular needs to have an answer to that. Last week he was quoted as saying that: “British laws must be based on British values and religious law should be subservient to British criminal and civil law.” How come then that Gordon Brown, when Chancellor, wanted “to make Britain the gateway to Islamic finance and trade”? And, to support that, government introduced changes to the taxation regime to accommodate Sharia-compliant transactions.
To appreciate the full impact of Sharia on City law and business you have only to go to Clifford Chance where Islamic finance is an important activity. The firm was named Euromoney Islamic finance firm of the year in 2007 and it has scores of lawyers both in the Middle East and in London practising Sharia. Habib Motani explains: “Doing deals that are Sharia compliant is a standard part of what we do. It’s part of the mainstream.”
But does this mean that there is now a rival jurisdiction operating in London? Has Sharia sneaked into the Square Mile by the back door while the good Archbishop waits befuddled at the front? Well, in the spirit of Canterbury unclarity, the answer is Yes (and a little bit No). What is clear is that transactions hatched in London by UK lawyers are being reviewed by Sharia scholars in the Middle and Far East who judge whether or not they comply with Islamic law. If they do not, they do not go ahead. So in practice the jurisdiction of Sharia is now well established in Britain. Islamic finance and the Square Mile >>> By Edward Fennell
