London fights for financial crown

London: Europe's finance centre
London: Europe's finance centre

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London: Europe's finance centre 02:49

Story highlights

  • Chris Cummings, CEO of City UK, says London lost its leadership position because of the financial crisis
  • Cummings says other European nations saw it as a great opportunity
  • He believes London has a talent pool unlike anywhere in the world
The financial sector has long been London's lifeblood, positioning the city as Europe's center of commerce.
But London has been hobbled by the global financial crisis. This year, for example, 27,000 jobs will be lost in the finance sector, according to the Center for Economics and Business Research. This will drive the number of finance jobs in the capital to 1998 levels, around 20% lower than the highs of 2007.
The weakness has given other European nations -- particularly those less dependent on financial services than the UK capital -- a chance to prosper.
Chris Cummings, CEO of City UK, an independent membership body promoting UK financial services, says London's leadership position was lost in the financial crisis. "We've seen other parts of Europe, partly in Germany, partly in France, all recognize the fact that because London is being weakened it's a great opportunity for them to start to build or rebuild their financial services sectors," he says. "That's been the case for the last couple of years."
At the height of the economic crisis, for example, some of the UK's biggest hedge funds threatened to leave London for Switzerland -- which sits outside the European Union -- amid a row over increased regulation.
Markets outside of Europe are also looking to build up economic centers. "Whether it's Brazil, whether it's China, whether it's ... Russia, countries want to build their financial services centers," Cummings says. "They want to get a slice of the action."
But Cummings says the UK still has a lot to offer. "I think it's absolutely essential that Europe remains a single market, and not only that but an open single market as well," he says. Growth is vital at a time of crisis, he adds, and it will come through open borders and a commitment to global trade.
And London has continued to play to its strengths. The city recently ranked number one on the Global Financial Centers Index, according to think tank Z/Yen. Cummings notes London has many benefits, including a geographical position which eases business between the U.S. and Asia. It also has a pool of exceptional talent, he says. "We start from a terrific place, but the future is in our own hands."