The British Bankers’ Association has urged lawmakers to take action to ensure the UK holds onto its position as a leading global financial center.
If nothing is done there is a risk that banks will move operations to other cities such as Hong Kong or Singapore.
A wave of new regulations has resulted in an 8 percent decline in UK banking jobs. According to the BBA, major financial firms have been moving their business elsewhere since 2010.
“We have now reached a watershed moment in Britain’s competitiveness as an international banking center” and “many international banks have been moving jobs overseas or deciding not to invest in the U.K.,” BBA Chief Executive Officer Anthony Browne said in the report.
“**Wholesale banking is an internationally mobile industry and there is a real risk this decline could accelerate.”
** Wholesale banking is the practice of lending and borrowing money on a huge scale.
The BBA also warned that the UK capital is also losing market share in lending and initial public offerings.
What should be done?
The BBA suggests relaxing a law splitting retail operations from investment banking, in addition to cutting taxes and implementing an easier process to hire workers from other countries.
The banking lobby group also said that the government should create a new body chaired by the Chancellor of the Exchequer to keep regulation in check and coordinate policy so that banks can flourish in the city of London. The new agency would be in charge of ensuring delivery of policy for international banking.
The BBA said that financial services is the biggest export industry country’s. The industry sells 62 billion pounds abroad every year, and employs over 405,000 people.
