Financial industry bodies in the City of London have been manoeuvring over who will be heard when work begins on exiting the EU
The need to influence government – and hence the future of regulation for decades – as the UK decouples from Europe has led to at least two new groups being formed, and others may yet emerge. Jon Moulton, the founder and managing partner of private equity firm Better Capital, said he had been invited by “half a dozen” individuals to join various bodies.
Jan Putnis, the head of the financial regulation group at Slaughter and May, noted “some jockeying for position among industry groups” but said it was “quite important” that such groups consolidate their efforts quickly.
He said: “A small number of them will emerge as leaders in different areas of Brexit-related work. I think it is quite important this happens quickly though, because if there are too many groups with overlapping remits then there is a risk that none of them achieve much because they are too widely dispersed and their efforts are too diluted.”
The new link-up will provide a formidable competitor to newcomers. The Financial Services EU Task Force, set up by Santander UK chair Shriti Vadera, is now working “under the same umbrella” as the City’s main lobby group TheCityUK to represent London’s financial community, according to TheCityUK’s deputy chairman Mark Boleat.
A spokeswoman for TheCityUK did not respond to a request for comment on the link-up but said the organisation was working “to ensure there is no duplication in work and that there is cohesion of messages at what is a critical juncture for the industry”.
Vadera’s Task Force, which has met twice since the UK’s Brexit vote, represents the interests of 12 influential City executives including HSBC chairman Douglas Flint, Allianz Global Investors’ vice-chair Elizabeth Corley, Morgan Stanley International’s chief executive Rob Rooney, and Barclays chairman John McFarlane.
However, there is still plenty of room for other voices. While the big firms in TheCityUK are focused on preserving access to European markets, there is another strand to City thinking that wants a more entrepreneurial, deregulated financial sector – even if it means reduced access to Europe.
Jeremy Browne, the special representative for the City to the EU, described the multiplication of voices as “a real issue” in an FN Brexit Briefing on August 4. He said: “If [UK Prime Minister] Theresa May… wants to spend an hour trying to get her head round the City and what its requirements are, and her office rings up, she wants three sides of A4 to read in advance and she wants someone to come along and spend an hour… talking to that three sides of A4. Who writes the three sides of A4 and who goes along to the meeting?”
Barney Reynolds, the head of financial institutions advisory and financial regulatory group at law firm Shearman & Sterling, said: “People will hedge their bets and join anything in case it’s the relevant thing, but that means there will be lots of disparate inputs.
He believes the UK government will listen to and engage with some groups more than others.
He said: “There is a proliferation of groups forming to participate in Brexit talks. There will be a limited bandwidth on the part of the recipients to listen… [But] I don’t expect the government would exclude anyone who has something useful to say.”
Simon Lewis, chief executive of Association for Financial Markets in Europe, said the government was “looking for a coordinated approach but not necessarily a single voice”.
Boleat said the government would take views from anybody and that he had been in a meeting at the UK Treasury attended by “half a dozen” trade bodies. He said: “The more representative [of the City] they seem to be, then the more note [will be] taken of them, so it’s not a question of the government having to choose between alternative groups.”
He said: “There is a lot of coordination. There’s far too much to do for people to start competing with each other.”
With reporting by Yolanda Bobeldijk