To be global, you need to be completely open: Mark Boleat

Interview with Chairman, London City Corporation

London City Corporation Chairman (Policy & Resources Committee) Mark Boleat, in an interview with Sanjay Jog, says though Mumbai is a major financial centre, opening the market in India's financial hub is key to developing the city as an international financial centre. Edited excerpts:

What has gone into London's emergence as the global financial hub?

I wouldn't say we made it the global financial hub. It had evolved as an international centre before we started doing much. You cannot create a global financial centre out of nothing; it takes time to develop.

London was a financial and business centre for hundreds of years and developed into a leading international financial centre through the past few decades. London has a very open economy, supported by an efficient and robust regulatory regime, a well-structured tax system and English law.

It is well-connected internationally. What we try to do now is further strengthen connectivity. A financial hub doesn't need only banks and financial institutions, but lawyers and professional services too.

How are foreign investors able to do their business in London? Do you offer any special incentives?

London doesn't give tax sops. It has been quite open, as we do not have any restrictions on banks and the same law applies to all. Any bank from any part of the world can start operations in London; it doesn't need to do a particular type of business. We welcome more banks from other countries, including India. Banks have to comply with capital and liquidity requirements. They have to comply with requirements applicable to any British bank.

This is also applicable to insurance companies and fund managers. We have a tax system that is predictable and a regulatory system that is onerous and works.

UK offers a level-playing field, offering an equal opportunity to all international businesses. To be an international finance centre, you need to have diversity.

What are the challenges faced by London and how are those being addressed?

The biggest challenge is the rising cost of housing in London. For average people working there, the cost of living is quite high. Many have to travel long distances, as in Mumbai. Therefore, attempts are being made on to how to make affordable housing available for the average working community in London. Besides, airport capacity is another issue, with a new runway being planned for Heathrow.

For improved transport connectivity, Crossrail, the new-high frequency, high-capacity railway for London and the south-east is being built. To have a successful global financial centre, you need to take a holistic approach. Therefore, when you have to get 10 things right, completing just two isn't enough.

What are your suggestions to convert Mumbai into an international finance centre?

I cannot advise what India needs to do. What I can say is that for an international finance centre, being open and international to the rest of the world is critical. Mumbai has been a major financial centre; major financial institutions, businesses are all located here.

To be a global financial hub, you have to be completely open. In Britain, we do not consider where institutions come from.

There are American, German, Singaporean and Chinese banks and financial institutions. We have all major international law and accountancy firms. You need international legal and professional services to support financial services.