special interest session - ifcs
TRANSCRIPT
SWIFT Business Forum
London 2013
Special Interest Sessions
International financial centres:
What are the opportunities?
www.thecityuk.com
International Financial Centres What are the opportunities?
Hamish Rowan-Hamilton Director, Financial and Professional Services TheCityUK
Professor Michael Mainelli Executive Chairman Z/Yen
www.thecityuk.com
The GFCI World
Top Twenty GFCI 13 Centres
Areas of Competitiveness
George Littlejohn Senior Advisor Chartered Institute for Securities & Investment
www.thecityuk.com
Andrew Todd Partner, Financial Services Tax Practice Deloitte
www.thecityuk.com
International Financial Centre Parameters of Competition
9
Parameter Description Ability to Influence
Skilled Labour Force
• Appropriately skilled labour force is the most important factor in developing an IFC, but is difficult to achieve in a short timescale.
• A community of professionals advisors that have the standards required in international financial services is essential.
Revenue Generation Potential
• Regardless of the quality of an IFC’s environment, international financial institutions will seek real revenue generating opportunities from an IFC.
• Therefore, identifying and developing the appropriate revenue growth strategies, whether domestic, regional or international is key.
Image/ Reputation
• Appropriate international branding and marketing is vital in building momentum for a developing IFC.
Legal environment
• A reliable, flexible and efficient legal system is a critical component for any successful IFC.
• As a general rule of thumb common law (based on case law) rather than civil law is more flexible in dealing with the demands of a dynamic financial services industry.
10
Parameter Description Ability to Influence
Political stability
• A stable political environment is critical in order to attract international finance, but can be difficult to influence.
• Assuming a certain level of political stability exists, other factors should receive greater attention.
Regulatory environment
• The presence of a fair, consistent and independent regulatory regime is important to maintain the confidence of the market participants.
• Often, responsiveness and commercial awareness can be key differentiators for IFC regulators.
Ease of doing business
• This is generally perceived to be a broad measure of a variety of factors that can impact the ability to conduct business in an IFC.
• It can include administrative burdens for establishing businesses, labour freedoms, clarity of business rules and corruption.
Fiscal environment
• An attractive fiscal regime remains a desirable feature for IFCs, even despite the recent focus on international tax policy.
• This is not the same as zero, or abnormally low, tax.
International Financial Centre Parameters of Competition
11
Parameter Description Ability to Influence
Location & proximity
•The location is likely to be an important influencing factor on the type of activities undertaken in the IFC.
•A cluster effect may exist for IFCs located near growing economic regions whereas isolated IFCs will need to serve an international market.
Infrastructure • This covers a variety of aspects such as telecommunications, data management and security, real estate planning, and transport access.
• Poor infrastructure can act as a constraint on longer term growth for IFCs.
Lifestyle • In a similar way to image this is a relatively subjective dimension of competition, but does impact the ability of an IFC to attract high-calibre financial services professionals.
Cost of doing business
• Given the current economic climate the operating costs for financial institutions, including real estate and labour, can impact location decisions.
• However, generally more developed IFCs have higher costs so a competitive advantage can be gained for some emerging IFCs.
International Financial Centre Parameters of Competition
www.thecityuk.com
International Financial Centres What are the opportunities?
Prof Michael Mainelli George Littlejohn Andrew Todd Dr Robert Barnes