On Wednesday, as a top regulator in the United Kingdom steps down, he said that the future of London as a global financial centre is not certain due to Brexit and Britain experiences a tough task to secure access to the European Union market for its insurers and banks.
The chair of the Financial Conduct Authority (FCA), John Griffith-Jones, said that he believed that London had successfully made the transformation from a financial centre of necessity to a financial centre of choice.
In a speech to mark his departure following a five-year stint, Griffith-Jones stated: “Little did we know then how this was about to be tested again by Brexit.”
He said that the future of the FCA after Britain withdraws from the European Union in March 2019 is all about maintaining a respected and stable position as a “tectonic plate” amongst many others.
Griffith-Jones said: “But as we all know, we are not the only tectonic plate in town, and the all-too-adjacent grinding noise of politics bumping up against economics makes the long-term outcome uncertain.”
His warning differs with pro-Brexit lawmakers who state that the City will improve after Brexit and that the European Union will be hit hard by removing itself off from London.
French regulators perceive that Brexit is an opportunity to encourage insurers, asset managers, and banks in London to establish a new EU bases in Paris. Last week, the finance minister of France said that the most important economic sector of Britain would not get the bespoke deal that it wants.
Meanwhile, the European Union is attempting to rush through reforms in order to build a more comprehensive financial market as it experiences the loss of London.
Griffith-Jones stated: “Very recently both the Prime Minister and the Chancellor have set out their views of what the country wants from the negotiations for the financial sector. I am sure we all wish them well in what will be a tough few months.”
Griffith-Jones was the first chair of the FCA. The FCA is a watchdog that replaced a Financial Services Authority that was tarnished by its inability to see the coming of a financial crisis. He had a shaky start, with some senior lawmakers casting doubt on his suitability for the position.
Last month, the FCA was forced to give the parliament a copy of its internal report into the allegations that Royal Bank of Scotland mistreated its business customers.
The watchdog had was planning to give a right of reply to those who were mentioned in the report first. However, the lawmakers have published it in full.
Griffith-Jones stated: “A four-year legal process and a dense thicket of jurisprudential argument provide a far less attractive route to redress than the use of 24/7 media and the associated parliamentary support to pressurise the regulator to short circuit due process in contentious cases.”