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Britain slams French criticism of London's financial dominance

Text by News Wires

Latest update : 2012-12-03

Britain has struck back at “mischievous” comments made by France’s central bank governor, Christian Noyer, who said Monday that London should give up its role as Europe’s financial hub because it opted out of the European single currency.

Britain on Monday dismissed as "mischievous" a suggestion by France's top banker that much of the euro trading currently conducted in London should be moved inside the single currency zone.

Christian Noyer, the governor of the Bank of France, has called for the British capital to be deposed as the biggest centre for euro trading, saying there is no rationale for the bulk of business being conducted in a country that opted out of European monetary union.

British Business Secretary Vincent Cable, on a visit to France for talks with ministers and business leaders, was withering in his response.

"It rather contradicts what I've heard from serious French bankers," he said. "They take the view that a strong British finance centre is good for Europe."

Cable argued that all of Europe benefited from London having established itself as the world's leading financial hub, pointing out that hundreds of thousands of French workers had moved there because of the career opportunities.

"It is not a zero sum game," he said. "We want to be part of the European single market in financial services and we see the City (of London) as part of it."

The British minister went on to compare Noyer's comments to London Mayor Boris Johnson's recent call for French entrepreneurs to decamp to Britain in a provocative intervention in the controversy over France's threat to nationalise an AcelorMittal steel plant.

"Boris Johnson is not a member of the British government and I'd put those comments on the same level as Mr Noyer's," Cable said.

"People can be mischievous."

London handles around 40 percent of world trade in euros, more than all of the 27 euro member states combined.

Speaking earlier on Monday to reporters on the sidelines of a conference in Tokyo, Noyer said: "There are offshore centres outside New York, but New York remains the main centre for the US dollar.

"The American authorities are not against the US dollar being traded in London, but they are very keen on not having the essential business being done outside the US. We are the same."

He added: "It is clear there is no rationale for having the biggest financial centre active in our currency or providing services in our economic union being an offshore centre."

The latest spat over London's dominance of Europe's financial sector has blown up ahead of negotiations in Brussels this week on moves towards a euro banking union.

Measures under discussion include giving the European Central Bank much stronger powers to regulate banks in the eurozone.

Britain fears the trend to greater integration of the eurozone countries could end with new rules being imposed on its financial sector and is demanding safeguards to ensure it is consulted on any decisions.


Date created : 2012-12-03


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