"City of London"--The World Financial Center

Lord Mayor Ian Luder
China Value: Could you give us a clear picture of "City of London"? And what's the function of it? What is the relation between "City of London" and the Greater London Authority?

Lord Mayor Ian Luder: The City of London provides local government services for the financial and commercial heart of Britain, the 'Square Mile'. It is committed to maintaining and enhancing the status of the business City as the world's leading international financial and business centre. Its responsibilities extend far beyond the City boundaries in that it also provides a host of additional facilities for the benefit of the nation.

     The City of London combines its ancient traditions and ceremonial functions with the role of a modern and efficient local authority, looking after the needs of its residents, businesses and over 320,000 people who come to work in the 'Square Mile' every day. Among local authorities the City of London is unique; not only is it the oldest in the country but it operates on a non-party political basis.

    The City of London Corporation plays the specialised, flagship role of promoting London's financial and business services, with the City's Policy Chairman working with government and Brussels on policy issues such as regulation and taxation, and as the Lord Mayor I act as a worldwide ambassador for the UK-based financial-services industry.

    On behalf of the Greater London Authority, the Mayor of London Boris Johnson's job is to get in place the transport infrastructure and planning frameworks, make sure the capital as a whole benefits from this growth, and promote London as the world's most international city.

 

China Value: "City of London" is one of biggest financial centers all of the world, what are the differences between City of London and Wall Street?

Lord Mayor Ian Luder: The City of London and Wall Street are both international financial centres characterised by foreigners trading with each other. However New York has a much bigger domestic market whereas the City is truly international.

    When I say 'City', I should point out that I represent the international financial and business services industry based in the UK, not just in the Square Mile - whether located across London or in regional centres. This industry is internationally-owned, internationally-staffed and international-managed.

China Value: What are the key responsibilities of the City offices in China?

Lord Mayor Ian Luder: The City of London has established offices in Beijing and Shanghai to strengthen trading and investment links in both directions between China and the UK through the provision of financial services; facilitate the business development of City firms by providing support for their visits to China as well as support visits by Chinese decision-makers and senior financial services practitioners to the UK.

    The offices in Beijing and Shanghai work to promote “the City” as a brand, covering financial services as a whole (including those under non-UK ownership) throughout the UK. These services include the raising of capital, insurance, asset management, legal, accounting and other advisory services, emissions trading, London’s exchanges, financial education, training and qualifications - to the government and private sector in China and promote awareness of the City as a unique cluster of capital and expertise and a centre in which to locate operations.

    The City has long-established links with China – we have had a Memoranda of Understanding with Shanghai for more than a decade and exchange between Shanghai and the City are longstanding.

China Value: What measures will "City of London" take in the near future to promote British financial business in China?

Lord Mayor Ian Luder: I was delighted to meet with the Chinese Premier Wen Jiabao earlier this month during his official visit to the UK. I shall be visiting China in May to promote UK financial services.

    In the first few weeks after I have taken my office, I have already received Party Secretary of Beijing Mr Liu Qi, Vice Mayor of Shanghai Tu Guangshao and the Chief Executive of Hong Kong Special Administrative Region Mr Donald Tsang. They have all reinforced China’s commitment to continue opening up their financial markets and that the financial sector is the first pillar industry of China’s economic development.

    In the course of my year in office, I will spend much time travelling, meeting government officials and the like around the world. I am particularly looking forward to my visit to China next year, when I will have the opportunity to continue to discuss many of these issues with your politicians and policy makers. The City has long-established links with China and I hope to continue strengthening these links.

China Value: Should we pay more attention to when it comes to innovation in financial services?

Lord Mayor Ian Luder: Recently financial innovation seems to have been associated in a negative way which frankly it should not have been. At one point, people referred financial products that were complex and that no one (whether it was the buyer or seller) seems to understand.  In view of this, I would like to refer innovation as modernization. The key for modernization is to ensure that efficiency is met without compromising on standards. We should strive on excellence and high quality financial services and products.

China Value: From your point of view, what are the positive and negative influences of financial crisis on the world and China?

Lord Mayor Ian Luder: It is clear from the outset that this year will be one of recovery and rebuilding. Here in the City, we have moved beyond the stage of asking “where did the crisis start?” and into “what can we all do to solve it?” and moreover, “what will the global financial system look like in the future?”

Whilst it is difficult to answer the above questions, one thing is certain - fast-growing economies such as China will play a crucial role in the post-crisis world. In fact, we could not deny that even before the crisis struck, the balance of the global economy was shifting. This was not to one particular centre - but in a gradually eastward direction.

    There has been extraordinary growth in China’s economy in recent years and in light of this and its growing presence on the world stage, central bankers in Europe, the United States and beyond, must work with their counter-parts in emerging markets to ensure we find broad principles which are agreed internationally but which are detailed enough to be applicable to all jurisdictions.

    This is why at the City of London Corporation – in partnership with practitioners and policy makers – we are doing all we can to maintain the City’s competitiveness.

China Value: What kind of lessons can the City of London and Chinese government learn form the Financial Crisis?

Lord Mayor Ian Luder: The City of London is very willing to share our experiences in dealing with the crisis and the lessons we have learnt. The exchange of personnel and training will be essential. Knee-jerk reactions to the crisis must be avoided. Careful thought must be given to the impact of any regulatory changes which are implemented and I believe strongly that in fact, if we make the right regulatory changes it will be of benefit to the world economy – get it wrong and we will throw away jobs and growth permanently. Although more regulation of off balance sheet products and derivatives will be inevitable, the last thing we need now - however strong the political sentiment - is the revival of protectionism.

China Value: What is the outlook for the City of London in 2009?

Lord Mayor Ian Luder: Despite the recent difficulties, London remains a truly global financial centre and we will continue to nurture our climate of openness to foreign talent and foreign ownership. We must all remember that we have faced downturns before. The City's past is peppered with disasters that have threatened to harm its reputation - the Great Depression, the secondary banking crisis of the Seventies, the 1998 Asia crisis and the dotcom crash, to name but a few - and each time the City has emerged bruised, but intact.

    Of course there will be more challenges ahead this year. The rule-book will not be re-written over-night and we have a long road ahead of us. I am confident however that the first steps along the road to recovery have been taken.
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