light on questionnaire responses on the Eurozone, the UK’s failure to adopt the Euro was
not regarded as an issue but UK involvement in European policy and the promotion of a
single market was seen as highly important. Another issue was the risk posed by “over-
burdensome” and complex UK regulation leading to increasing amounts of working time
having to be diverted in trying to keep abreast of requirements. One respondent described
the nature of the problem thus:
Monday to Friday I’m dealing with the queries put on me by the central regulators and
the rest of the week I can spend doing my job.
On the other hand there was a clear recognition that effective regulation is essential to
maintain the credibility of the financial services sector. The main message that came across
was the need for balance. The following quotations illustrate regulatory concerns:
It is just overwhelming, impossible for anybody to understand the complexities of the
modern regulatory system. The regulators don’t understand it, the regulated don’t
understand it ... the ability to move and do things for our clients - there are now just
whole areas where we just now would refuse to act for people just because, unless it’s
a really large amount of money, it’s just not going to be justified by the time we’ve got
through the paperwork.
There comes a point in time where the degree of regulation has got to such a degree
that they’re turning people off coming to the City and that’s a very fine line.
European legislation, employment and social is a nightmare - it worries us and its all
part of the chipping away. And it’s the things I deal with all the time - the prospectus
directive - all these directives from Brussels which we’re having to work incredibly
hard on.
Of course part of the attraction to many people is the relatively low direct rates of
taxation but if in fact there is an increasing bill on the indirect taxation whether its
rates, property tax, whatever, then you’re going to tilt the balance the other way too
much and I think that’s something the Government’s got to be very, very conscious of.
A current concern that was commented on frequently in the interviews was the
vulnerability of London to terrorist attack. Some firms emphasized the importance of
adequate contingency plans to cope with a major disaster. Nevertheless the concerns in
themselves were not discussed as a serious threat to the cluster. The comment, “I think
people have short memories with that sort of thing” summed up the general feeling.
However, one respondent believed that, were a major attack on London to take place, this
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