The international counting house the City of London is dearly hoping a funds-market-friendly government comes out of this election. Many working in the sector feel they have their backs to the wall.
Euronews found support for the Conservatives and Labour, but that distrust for the Liberal Democrats had grown. Whoever leads the UK must reckon with a European directive on regulating financlal services — just waiting to be sprung.
We went looking for opinions on this in the City.
One broker ventured: “People go where the money is. We’ve got China and India at our heels, and if we can’t play because of regulation anti-banking sentiment, I don’t think that is a good thing”.
At the same pub, we heard: “My personal belief is that the Conservatives will have the best position (slightly eurosceptic): that we have to protect our own financial services before we look after others’.”
The proposed EU rules could not help but affect the UK since some 80 per cent of Europe’s hedge funds are based here. Many people are uncomfortable that the directive could win European support yet act against their country’s interests.
Ana Haurie, the Managing Director of Dexion Capital, said: “This directive is very much about politics, and there is in Europe an antipathy toward hedge funds — but it’s not just hedge funds, because the scope of this directive is very, very broad.”
The controversial text will be discussed by the EU’s finance ministers on May 18. This was to have happened in mid-March but the current Spanish EU presidency took it off the agenda to lessen electoral campaign headaches for Gordon Brown.
Iain Begg, at the London School of Economics, said: “Protecting a financial center is important for the British economy generally, in the same way as let’s say tourism is for France or manufacturing is for Germany. They are the leading-edge sectors of the economy that provide the underlying wealth. So on the one hand what the electorate is looking for is policies which will sustain the competive position of the City of London, but at the same time there is so much antagonism towards the bankers, who are blamed for causing the recession; there is a demand at the same time for regulation and control of the banks.”
In an industry that faces severe cuts in profit and pay after it helped trigger a global economic slump, the EU Commissioner in charge of regulatory overhaul, Michel Barnier, said everyone must realise that the towering profit levels seen before the global financial crisis are a thing of the past.