David Livingstone says the UK's attractiveness to international banks has not diminished since leaving the EU. Photo: JULIAN SIMMONDS for The Telegraph
Brexit did not hurt the City of London, a senior Wall Street boss said, despite fears that exiting the bloc would cause bankers and businesses to flee the Square Mile.
David Livingston , Citigroup's chief executive for Europe, the Middle East and Africa, told The Telegraph that Brexit «didn't shrink» the city, adding that Brussels' efforts to create a rival financial center to London have so far not yielded meaningful results. .
The UK's appeal to international banks lies in its strong rule of law, common language, geographic location, quality of education and quality of life, and «Brexit hasn't diminished any of that,» Mr Livingston said.
«I have every confidence that the UK will retain these characteristics and therefore remain our headquarters.»
Financial executives warned ahead of the 2016 referendum that Brexit would mean the loss of 232,000 jobs in the City. However, there has been no mass exodus.
Livingstone said Citigroup has moved «several hundred positions» out of London since the UK left the EU, largely due to regulatory requirements, «but nothing more» .
He added: «I still think it's important that the UK focus on being competitive and not just resting on the laurels of characteristics that I think are obviously permanent, but you don't want to play them down without being able to [regulatory ] settings».
Chancellor Jeremy Hunt recently unveiled a series of reforms to boost Britain's financial services industry. Photo: Aaron Chown /PA
His comment comes days after Jeremy Hunt unveiled a series of deregulation reforms aimed at stimulating the post-Brexit UK financial services industry.
The Chancellor used his first speech at Mansion House last week to announce a package he says could raise up to £75bn to boost pension savings and raise more capital for fast-growing British businesses.
Livingston said: “The reforms announced by the Chancellor show that the UK is asking itself questions about how to keep capital markets vibrant… So I think that's really positive. It is very good to ask difficult questions and find answers. London must compete.”
Last year, Citi announced plans to overhaul its main tower at Canary Wharf at a cost of £100m in a vote of confidence in London.
Work has already begun on the 42-story office building at 25 Canada Square, which is expected to take three years to complete. The renovation will bring it up to new environmental standards and create flexible workspaces and collaboration spaces.
In addition to the UK, Citi operates in two dozen countries on the continent, and its main European bank is headquartered in Dublin .
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The EU has been trying to create its own financial markets to rival the Post-Brexit Square Mile to shift activity from London to the Continent.
However, Livingston said, that there are still serious obstacles to the work of international banks. within the EU.
Last year, Citi announced a £100m plan to overhaul its main tower at Canary Wharf in a vote of confidence. in London. Photo: Heathcliff O'Malley
He said: “The post-Brexit EU has a lot to build in terms of the depth of its capital markets. It has a banking union and a capital markets union, both of which are not growing as fast in terms of delivering results as a place where corporate clients and institutional clients can raise capital and do so seamlessly within the union.” < /p>
The European Commission has tried to move some of the activities within the block: the main focus of the profitable clearing activity is in London.
Clearing houses act as intermediaries in derivatives transactions between banks and steel a vital part of the financial system since the 2008 financial crisis.
The Commission has been criticized for its plans to punish banks for failing to move lucrative clearing activities out of the City of London.
Last year, the European Banking Federation (EBF), which represents the bloc's main lenders, said that this policy will cause «serious market shocks» and «significantly reduce the attractiveness and competitiveness» of EU clearing houses.
Livingston. said: «If they build a wall around the EU and say that the EU will finance itself, we think that this is not the most optimal political setting.» if they don't introduce clearing in the EU, they will actually be looking for a better way to finance European business.
“When we talk to politicians and member states, we emphasize that what the EU really needs to want is [access ] to international capital markets, as well as to capital markets established within the EU to finance companies.”
Citi was one of the first international lenders to register in mainland China in 2007 after local regulators relaxed rules encouraging foreign banks.
Despite growing geopolitical tensions between China and the West, Livingston believes that the region continues to represent a key growth opportunity for Citi.
He said, “The level of opportunity remains high because China still needs to develop its banking, securities and market systems.
< p>“He is constantly growing and creating bigger companies and they need funding. Thus, the outlook in this dimension remains positive. We expect our institutional business in China to grow with these opportunities.
“Geopolitical tensions are clearly there, but I think they are not an obstacle at the operational and business level.”< /p
Livingston declined to comment when asked if Citi had contingency plans for Chinese businesses in the event of Beijing's invasion of Taiwan.
Last month, Citi told its 9,000 UK employees that it would start recruiting them to «responsibility». for compliance with the hybrid rules of the bank. The company said it will do so by starting to track employee attendance.
Job status by popularity (work from home, hybrid)
Citi is more flexible than its Wall Street competitors. The bank requires employees to be at their desks at least three days a week, which is contrary to the requirements of competitors such as JP Morgan. A competing lender recently ordered its senior staff to come to work five days a week.
Livingston said: “In an organization of our size and scope, people need to come together to communicate and develop internal relationships. So it's absolutely necessary.
“However, we acknowledge that the Covid experience means there are flexibility dividends. And it's not just the number of days off, but also the effortless flexibility of being home on Thursday afternoon but not being home on Thursday morning, which is very valuable.”
Citi's commitment to Canary Wharf emerges at that time as other major banks and law firms abandon the London docks in favor of the Square Mile.
Last month, HSBC announced it was abandoning its 45-story skyscraper at 8 Canada Square, nicknamed the «doom tower» by staff — and move to a smaller site in a refurbished former BT headquarters near St. Paul's Cathedral.
Livingston said of the Citi Canary Wharf overhaul: “We're making this investment for 25 to 30 years. . HSBC will make its own decisions. I think it also reduces its footprint.
“Canary Wharf is only getting better. The Elizabeth line is a game changer. The level of residential and retail real estate means it's actually much less than just an island of banks and law firms. Now it has become much more diverse and in some ways more like the City.
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