ABI - no to Spanish practices

As London braces itself today for riots and protest against the G20 summit, the ABI warned that the City would suffer the most from the world leaders agreeing too tough regulation proposed by the Spanish central bank.

Stephen Haddrill, the ABI’s Director General, said: “The future of the UK’s financial services rests on a knife edge at the G20. The host city London can lead the way out of the crisis in financial services but it also has most to lose. With the financial services sector contributing 8% of the UK’s GDP, a bad outcome would be a loss felt in London and in towns and cities across the country.

“The UK insurance industry is the second largest in the world, employing 309,000 people. It has achieved this by innovating and by providing world beating services in open, competitive markets. If the G20 flirts with protectionism, second-rate competitors will be given an edge they do not deserve at the consumers’ expense and the UK will be the clear loser.

He said he accepted the need for some reform of regulatory structures but praised the FSA’s approach. “It is a sophisticated regime that relies on hard analysis not crude ratios topped up by a bit of cash to meet the unexpected,’” he said.

“The Spanish central bank does not have a monopoly of the answers. London needs to make its voice heard so unnecessary costs for industry and consumers are not hardwired into the system for a generation.

“The ABI believes a pan-European supervisor of supervisors could be a sensible way to improve cross-border regulation in the EU. It makes sense for this body and any other pan European financial supervisory body to be based in London, which has a key role to play at the heart of world markets as the bridge between Europe and the rest of the world.”