It has been almost 18 months since Brexit happened. What is your assessment of City health?
Those avid Remainers like me were very worried during the referendum. We think jobs will be lost by tens of thousands. In the end, these fears did not materialize. As of last March, only 7,000 jobs had been lost. You need to remember that there is a balance between jobs transferred to the European Union and jobs done in European establishments in the United Kingdom in order to continue to serve the British market. The job cuts associated with the loss of a European passport are unfortunately inevitable, in a City like Canary Wharf, where many banks are based. But the damage is clearly not as severe as experts predicted.
How do you explain this strength?
If you look at our history over the past 1,000 years, the City has always been strong because it has always adapted to change. We always face shocks because we have to deal with the shocks to come, with inflation, the rising cost of living, and the war in Ukraine, which is strongly condemned by the City of London.
Did long distance work during a pandemic delay movements?
We can only say in the long term. You know, for big changes like Brexit, markets need time to adjust. But I never believe that working from home hides the effects of Brexit. I still think the situation has stabilized. Where we see a clear effect of teleworking on neighborhood traffic. This is 60-70% of what it was before the pandemic, and trips are mostly concentrated on Tuesdays, Wednesdays, or Thursdays. So we worked on a plan to make the neighborhood attractive 7 days a week, 24 hours a day.
During the Brexit deal by the end of 2020, financial services were gone. They can be the subject of a separate protocol. This “memorandum of understanding” has not yet been signed. Can you live without?
We deeply regret the lack of financial services agreement, as we need regulators on both sides of the Channel to coordinate to avoid market fragmentation affecting activity. This “memorandum of understanding” seems important to us. It’s like a divorce settlement. We are divorced from the European Union and we need a workable settlement on how the relationship will work in the future. Financial services remain a big factor in EU exports for the UK. That is why we need this agreement and positive cooperation with our European partners in financial services.
Political conditions seem more favorable to you since the war in Ukraine?
Obviously, yes. Relations between the United Kingdom and the European Union have improved in recent months. In a number of areas we can have a more effective dialogue. We welcome the re-election of Emmanuel Macron in France. This is a positive element seen from the United Kingdom. The City of London has an office in Brussels with a dozen employees. My position is that we must continue to strengthen ourselves in Europe to continue to play a pragmatic role in the EU. Brexit was very divisive, and I hoped, during my mandate, to rebuild relations with European states.
The European Union provides an equivalent to the United Kingdom, for clearing houses. Is it a regret?
We need to turn the page in this debate. Of course, we want to have a lot of equivalents, but it’s never possible for us to get any new ones in the short term. We have become accustomed to the idea that we should prioritize the situation now.
A new Financial Services Act was announced in Speech from the Throne. What can we expect?
Fundamental changes in financial regulation are to be expected, simply because we need to redesign a framework for the UK. We don’t yet know the details, but this law should be logically nurtured in the various consultations launched over the past 18 months. On the part of the financial sector, we do not see much appetite for many regulatory changes. The idea is, in some well-organized areas, to adapt the rules inherited from the EU to make them more relevant to the United Kingdom.