15 September 2008
City Policy Chairman comments on news from US re Lehman
Brothers etc.
Following news re Lehman Brothers and Merrill Lynch, Stuart
Fraser, the Policy Chairman of the City of London Corporation,
said:
"This is very serious and part of the on-going adjustment in
financial services. Clearly the sector is hurting - indeed it's
meant to hurt - but after the hurt it will heal.
"The US has moved to tackle the specific issues with individual
banks swiftly. Indeed, the Lehman Brothers news sends an important
signal that the taxpayer can't pick up the bill for every failure
and that every case needs to be treated individually. Bank of
America is a safe haven for Merrills and the mutual liquidity aid
club is a good sign of banks working together.
"Obviously this has been a bad time for the global financial
services sector and there will need to be changes in how things are
run. We are working with governments and business to find the best
solutions and ensure that responses are proportionate, and
contribute to the longer term future of the industry.
"My focus is to make sure that the regulatory response to this
does not hamper the City's competitiveness. Over-regulation, for
example through Sarbanes-Oxley, did not prevent this problem and it
won't cure it - or prevent the next crisis. What's needed is a
careful and measured response, so where new regulation is required
it should be proportionate and appropriate.
"Globally, and in the medium and long term, nothing changes the
fact that economies such as China, India, Brazil and others are
growing fast and will need financial services to help them in that
growth. There are major medium-term opportunities for a competitive
City of London and we will need to be ready to take them.
"The City has weathered heavy storms before and it will weather
this one."
Stuart Fraser tonight meets with Liberal Democratic political
leaders at their conference in Bournemouth - as part of this
month's round of talks and meetings with all
major political parties.
Ends