If London wants to lead crypto trading we'll need better rules

LAST week The City of London Corporation revealed that the capital was now sharing its position as the world’s number one financial centre with New York.

- Professor Stefan Allesch-Taylor

Interestingly not so much because London’s score had diminished, it was the same as last year, but because New York had improved its performance in key areas of finance.

This piece of news prompted the repetition of hairbrained ideas that will supposedly make London more appealing to international investors.

My favourite is the bizarre Edinburgh Reforms announced in December 2022. These propose a loosening of the current “ring-fencing” rules around deposits to give banks greater flexibility with depositors’ money (that translates to taking more risk for more return — maybe). Considering the recent collapse of Silicon Valley Bank and subsequent contagion fears, this just looks reckless to me.

A prime suspect for London’s woes are UK pension funds. At first glance, this doesn’t look misplaced. UK pension fund asset allocation has changed radically in the last 25 years or so. In 1997 they had a 53% weighting to UK equities, last year it was down to just 6%. A smoking gun.