ABI: G20: London’s future needs securing

The future of London as a financial centre could be decided by this week’s G20 Summit. The Association of British Insurers is warning that the host city has the most to lose if any overly onerous regulatory framework is agreed on Thursday. Stephen Haddrill, the ABI’s Director General, said:

“The future of the UK’s financial services rests on a knife edge at the G20. The host city London can lead the way out of the crisis in financial services but it also has most to lose. With the financial services sector contributing 8% of the UK’s GDP, a bad outcome would be a loss felt in London and in towns and cities across the country.

“The UK insurance industry is the second largest in the world, employing 309,000 people. It has achieved this by innovating and by providing world beating services in open, competitive markets. If the G20 flirts with protectionism, second-rate competitors will be given an edge they do not deserve at the consumers’ expense and the UK will be the clear loser.

“We accept the need for some reform of regulatory structures but those who criticise London’s way of regulating also need to remember what has been achieved by the FSA and the insurance industry. Since 2003 insurers have weathered this crisis with a resilient capital position, because of a regulatory process based on careful assessment of risk and prudent reserving. It is a sophisticated regime that relies on hard analysis not crude ratios topped up by a bit of cash to meet the unexpected. The Spanish central bank does not have a monopoly of the answers. London needs to make its voice heard so unnecessary costs for industry and consumers are not hardwired into the system for a generation.

“The ABI believes a pan-European supervisor of supervisors could be a sensible way to improve cross-border regulation in the EU. It makes sense for this body and any other pan European financial supervisory body to be based in London, which has a key role to play at the heart of world markets as the bridge between Europe and the rest of the world.”

– ENDS –

Notes for Editors

1. Enquiries to:
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)

2. The ABI is the voice of the insurance and investment industry. Its members constitute over 90 per cent of the insurance market in the UK and 20 per cent across the EU. They control assets equivalent to a quarter of the UK’s capital. They are the risk managers of the UK’s economy and society. Through the ABI their voice is heard in Government and in public debate on insurance, savings and investment matters.

3. An ISDN line is available for broadcasts.