Damning verdict on City: ‘No longer fit for purpose’ – The Independent


The Liberal Democrat Treasury spokesman on a v...

The Liberal Democrat Treasury spokesman on a visit to Cambridge today. (Photo credit: Wikipedia)

A report commissioned by business secretary Vince Cable was made public earlier this week and finds a financial sector that is no longer fit for purpose. Professor John Kay, a leading economist, has made his recommendations after scores of submissions and interviews with top business and investment people.

In particular, Prof Kay says that regulation needs an overhaul and that traders seeking short-term profits are not acting in the wider interests of the public and should be marginalised.

His review comes when the stock of the banking sector has never been lower, given a seemingly constant run of scandals involving rogue trading, interest rate fixing and global money laundering.

The report finds that short-termism is an underlying problem in UK equity markets, principally caused by a misalignment of incentives within the investment chain and the displacement of trust relationships by a culture based on transactions and trading.

 His recommendations, which are aimed at key players in UK equity markets, as well as Government and regulators, look to:

  • Improve the incentives and quality of engagement, including by establishing an Investor Forum to foster more effective collective engagement by investors with UK companies
  • Restore relationships of trust and confidence in the investment chain, including by applying fiduciary standards more widely within the investment chain
  • Change the culture of market participants, including by adoption of ‘good practice statements’ by company directors, asset managers and asset holders that promote a more expansive form of stewardship and long-term decision-making throughout the investment chain
  • Realign incentives by better relating directors’ remuneration to long-term sustainable business performance and better aligning asset managers’ remuneration to the interests of their clients

Damning verdict on City: ‘No longer fit for purpose’ – Business News – Business – The Independent.

Scottish finance industry update: Green Investment Bank


Following on from last weeks report from PwC (see below) we now have the efforts being made to lure GIB to Edinburgh. Unless I am very much mistaken, it makes sense on every level…except, perhaps, a Political one!!?

It would certainly continue “sit well” with the, recently announced, Glasgow-based “Renewable Energy Zone”.    

Why should the Green Investment Bank come to Edinburgh?

We think there’s a compelling case for Edinburgh over and above any other city in the UK, including London. Really that’s based on Edinburgh’s ‘three-legged stool’ if I can call it that of expertise in financial services, asset management and renewable/low carbon energy. Our academic research base is also strong, with dedicated clean energy research centres at University of Edinburgh, Heriot-Watt University and Edinburgh Napier University. We don’t believe there’s any other location with this combination of assets – apart from London. The problem with London is that it’s the metropolis and a green investment bank will take its place among the other agencies and departments of government. Whereas in Edinburgh, it would be highly visible and mobile in terms of its contribution to the rest of the UK…

Lobbying for the UK Green Investment Bank to be located in Edinburgh

 

I was out and about yesterday and only realised this morning that the content has gone missing! The PwC report said they needed to act quickly but if they made the right moves there was a potential to double the number of jobs in the sector – currently at almost 100,000, as new banks moved into Edinburgh and Glasgow to recruit from those being shed by the traditional lenders. Tax powers More collaboration – within the industry and with universiti … Read More

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