On day 5 Team GB struck gold with the ladies coxless pairs taking gold by clear water- well done indeed- and tour de force Bradley Wiggins wins again too. Earlier the British men’s gymnastic team earned a first ever podium place with bronze. More to come hopefully and this is a time for London to shine.
However the heaving public transport system and strict security from the much maligned G4S and the army now helping, is necessary as the Games remain a prime opportunity for a fanatic of many persuasions to make a name for themselves too. Let’s hope there’s not even a footnote to relay.
London’s prosperity needs to continue after the games with a weak economy and further financial scandals in the City itself need to be addressed if the rest of the world is to continue to wish to live, invest, trade or visit for a while. The rest of the UK benefits from a £15 billion* subsidy each year from London’s economic contribution and also should wish its continued prosperity too. Therefore, further delay or over-zealous reform and regulation of the financial services industry would only damage this end. Further disingenuous practices too should be highlighted and tackled promptly too such as fees generated by security lending to hedge funds by asset managers are retained and not returned it to the fund investors. New rules coming in February 2013 from the European Security Markets Authority intend to correct this occurrence have been welcomed by Professor John Kay in his report on UK equity markets**.
Professor John Kay, economist and regular FT contributor, has produced a British government sponsored review on the workings of the UK equity market and their long term performance and governance of UK quoted companies. His review recommends to the Department for Business Innovation and Skills headed by Vince Cable to improve relations between companies and investors, reduce financial intermediaries and disclose fund managements costs. Reducing short-term approaches and therefore company incentive schemes based around quarterly reporting should be discouraged with long-term investors working with focused managers on long term value building strategies. Investors should streamline their portfolios to enable them to achieve this end.
It has been generally well received and supported by also criticised as it is too UK- centric and could insolate UK companies from overseas investors who now own over 40% of the quoted UK equities market***. London’s financial markets don’t want to become more expensive to operate**** at a time when international investors are looking to see what emerges finally from the current reform in process therefore rather than “light touch” regulation enacted by the previous government real care is required to ensure “ clear effective” regulation by bodies with financial clout to enforce them. I hope the BoE is ready for its enlarged role.
A fully engaged international London open for business and people to work there in a regulatory framework and tax system which rewards success and allows failure too without recourse to the public purse is required along with some decent policies on housing provision and transport initiatives in rail, air and road. To achieve this would be a real result for GB and a lasting legacy for years to come.
LDC
References and reading-
* Leader article, London’s precarious brilliance, 30th June 2012 edition, The Economist page. 15, The Economist Newspaper Ltd.
**Lead article, Companies and Markets, Financial Times 26th July 2012 edition p.17, Financial Times Ltd,London UK.
*** National news, Financial Times 24th July 2012 edition p.3, Financial Times Ltd, London UK.
**** Kay Review, Lex column, Financial Times 24th July 2012 edition p.16, Financial Times Ltd,London UK.
Buttonwood, Taking stock, 28th July-3rd August 2012 edition, The Economist page.61, The Economist Newspaper Ltd.