ABI welcomes Cable's review

Business secretary Vince Cable’s review of City short-termism has been welcomed by the ABI.

In his speech at the CBI annual conference, the secretary of state for business announced a wide-ranging consultation paper looking at foreign takeovers, the role of short sellers and hedge funds and whether remuneration levels push companies to make short-term decisions.

The ABI's acting director general Maggie Craig said: "The insurance industry are long-term investors and welcome efforts to promote a longer term attitude to investments. The secretary of state for business is absolutely right to recognise that the way to achieve this is through a balance of regulation and best practice and not an overly prescriptive approach."

"We believe that in order to truly promote a long-term approach, there needs to be a consideration of the wider current regulatory framework for long-term investors and the incentives in place. For over twenty years, there has been a trend to promote short-term gains through various tax and regulatory initiatives. Long-term equity investment requires a level playing field."