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"The Great Game: Clustering In Wholesale Financial Services" - publication available to read online

Stephanie Rochford Monday, 13 June 2011 10:16

We are delighted to announce that Dr Malcolm Cooper's paper - "The Great Game: Clustering In Wholesale Financial Services" - is now available to download online.

In his foreword to this Financial Centre Futures publication, Michael Mainelli comments:

"Perhaps the most illuminating observation for me in Malcolm’s paper was to realise that clustering forces may well be stronger in one of the most weightless of industries, financial services. Malcolm reminds us that an industry which makes money from volatility only thrives in conditions of stability, particularly political, regulatory and tax certainty. Malcolm highlights that major financial centres are less prone to revolution or conquest. I have argued that London’s historical, and global, attractor was its tradition of “not treating foreigners unfairly”. Malcolm emphasises the role of law, regulation and taxation certainty. Business people and policy makers talk about certainty. Policy makers frequently misinterpret the desire for certainty. Business people know that rules must change, but want certainty about the way rules are made, changed and enforced. Business people don’t mind competition, but they want to know that competition will be fair. Business people don’t mind rule changes for fairer markets, but do mind capricious rule changes for electoral gain or to fill depleted state coffers.

Financial clusters seem an easy win for policy makers, low investment costs (mostly rewriting rule books), while bringing lots of high-paying jobs (how attractive would financial services clusters be if the jobs were of average pay is an interesting question). While Malcolm questions policy makers’ abilities to create financial clusters, he certainly doesn’t question their ability to nurture them. For policy makers in aspiring financial centres, the gauntlet that Malcolm throws down is to create a stable regime while growing. For policy makers in leading financial centres, Malcolm points out that financial clusters are theirs to lose. The challenge is larger for the aspiring, but in today’s climate a few leading centres seem to have policy makers who want to lose. For both, Malcolm’s paper should be required reading."

The paper will be officially launched by Long Finance at a round table event on Monday 27 June from 13:00 to 15:00 at Barnard's Inn Hall, EC1N 2HH. The event will include a presentation by the author, followed by a panel discussion and a Q & A session. To reserve your place at this free event please register here.