THE CITY of London retook top place last year from New York as the world’s leading financial hub in the respected Global Financial Centres Index – compared to Paris at number 37.
That might seem like bad news for France – but, looking at the big picture, it benefits from being near such an important centre, says Allie Renison of the Institute of Directors (IoD), a body representing people who run businesses in the UK that also has branches in Paris, Monaco and Lyon.
Ms Renison, who lobbies the EU and talks to business groups on the continent, said: “There are many factors which go to make London so successful, first of which is the overall ease of doing business here.
“One of the reasons why so many French people come to work here is that the government and Brits in the City don’t necessarily see it as a national industry. The City thrives on being very open and encouraging people to come in. It’s a European hub.
“There are as many French bankers in London as there are in Paris – around 50,000 in each. And many have specialisms, like risk management and derivatives trading, which are not as common among Britons, so from the UK perspective there’s interest in having the knowledge they bring.”
Ms Renison said the proximity of the City also benefits France because the financial markets of London and Paris are closely integrated. “Banks like SocGen [Société Générale] and BNP Paribas all have a big presence in London,” she said.
“And that degree of integration brings a host of other services that depend on it, such as legal and other professional services industries. And there is a high UK presence in France as well.”
There are French people at the top in the City – including the chief executive of the London Stock Exchange, Xavier Rolet, who is seen as having revitalised it. “A few years ago it was seen as diminishing in importance and he’s turned it around,” she said. “If you look at the number of French people in very senior positions in the City, it’s revamped the attitude towards the French in business.”
She said Mr Rolet, originally from Savoie, has also stressed that Paris is likely to aim at consolidating its close links to the City rather than developing further ones with Europe’s next largest hub, Frankfurt.
“French firms over here will want to stay closer to the City rather than moving into Frankfurt, because they’ve been over here for a decade and a half and there is a lot of familiarity between French and UK firms and professionals in the City.
“Also if you consider the City in terms of attractiveness for French families, there are very respected schools and whole sub-industries – legal and educational – that mean they want to come here. For example they appreciate the lycée in London, which has a curriculum decided by the French Education Ministry but has a more British, child-centred way of educating.”
In terms of the debate over the role of the UK in the EU, she said members of the IoD would mostly like to stay in, but are watching negotiations that are under way; the IoD is campaigning for a “pro-business agenda across Europe”.
It is all about “flexibility”, she said – in some respects she said the UK views with concern the amount of recent EU legislation on financial services (matters like bankers’ bonuses), but in other respects it wants to maintain the right to regulate things more tightly than EU rules call for, especially in the pensions and insurance industries.
That said, the UK also has some concerns that plans for a financial transactions tax that will be applied to some eurozone countries may have a negative knock-on effect on trading in the City, even though the UK will not take part.
However, Ms Renison said the UK is no longer asking for a special veto on financial services laws.
It is important that France realises on a political level that the City is an EU asset. While this is recognised among French financial firms and services professionals, it is not appreciated by politicians as much.
“The City handles two-thirds of Europe’s financial services,” she said. “It remains home to more international listed companies than any other stock market in the world. In the next 10 to 20 years, competition will not be intra-EU so much as between London – as the EU hub – New York and Asia, which is really taking off.
“It’s going to be important in the run-up to the [UK independence] referendum to have this message that the City is very important for France and Europe, not just the UK.”