City mayor plays ambassador for UK's financial services

London

WITH UK election uncertainty out of the way, the City of London - the UK's financial centre - is aiming to boost trade and investment with the Association of South-East Asian Nations (Asean).

In an interview, Alan Yarrow, Lord Mayor of the City of London, said that during his coming visit to Sri Lanka, Indonesia, Singapore and Malaysia from May 17 and May 26, he will effectively be an ambassador for Britain's financial services and will look to promote two-way business and investment with these countries. Singapore, in particular, will be a key partner of the City.

Mr Yarrow intends to allay foreign investor concerns about the UK's coming "in or out of the European Union (EU)" referendum, stressing that the City believes in free trade, not only with the European Union but with Asean and other global nations.

He also strongly believes that City executives and professionals have become even more convinced that the UK needs to be part of the EU since an IPSIS Mori survey 15 months ago.

That pollster had interviewed 101 UK-based chief executive officers, chairmen, chief information officers, board members, directors and partners of financial and related professional services.

It found that 84 per cent wanted the UK to remain a member of the EU. Moreover, the survey showed that the vast majority of senior City professionals thought that the UK's EU membership and its inclusion in the Single Market were key to the UK retaining its competitiveness.

Each British vote will count in the referendum, which will take place before the end of 2017. Both polls and calculations of the statistical breakdown of the some 30.5 million UK citizens indicates that the majority will vote for "in".

In the potentially unlikely case that UK votes against staying in the EU, Mr Yarrow described the City as an "amoeba", explaining: "We adapt. We are traders."

As a former equity and derivatives executive who ended up as chairman of investment bank Kleinwort Benson, previously part of the Dresdner Bank group, Mr Yarrow insisted that the EU is "a very good thing as the language of commerce is growth and jobs". He also stressed that the City wants free access to talent from the EU and the rest of the world.

In particular, Mr Yarrow has an affinity with Malaysia and Singapore as he was born in Johor; his mother was actively involved in establishing Jaro (Johor Area Rehabilitation Organisation), the charity which rehabilitates people with disabilities; and as a young boy, he went to primary school in Singapore.

Mr Yarrow will visit the rehabilitation centre in Johor prior to coming to Singapore on May 21.

Mr Yarrow is very enthusiastic about helping City organisations build ties and trade with Singapore and other Asean nations. Later this year, he will visit Hong Kong and China.

Affable and personable, Mr Yarrow also has a steely side to his character and was a former member of the UK Takeover Panel as well as vice-chairman of the Financial Services Authority practitioner regulatory panel; a Justice of the Peace; and Sheriff of the City.

When asked about bank misconduct, he is scathing in his criticism: "There is no excuse for misbehaviour."

He condemns "anyone who puts themselves before their customers" and said that bankers need to behave properly. "If people put lives at risk financially, they should be disciplined and punished."

He stressed that the City needed to be "trustworthy", and at last, miscreants were being punished. Yet he is frustrated that when such wrongdoing was taking place, there was inadequate criminal financial legislation to hold directors to account.

Replying to a question on the unpopularity of high salaries and bonuses, despite fines, losses and poor performance of banks, Mr Yarrow said that when he joined the City in the early 1970s, there was "variable" pay.

Employees, including executives, were paid low basic salaries and bonuses for performance during good times in the markets. This enabled brokers to remain financially stable in bad times.

From the mid-80s onwards, banks acquired brokers and "hijacked" the system so that pay was no longer variable. Basic salaries soared,and bonuses were mostly guaranteed, regardless of performance. This payment system is inherently "unstable", he warned, especially if the stock market slides and City business declines in any cyclical downturn.