1 September 2009
European financial services industry ‘will play crucial role in
economic recovery across the EU’
Despite the crisis, wholesale financial services based in
countries throughout the European Union will play a crucial role in
driving the EU economy towards recovery, according to new research
published today that predicts a medium-term revival, albeit in a
subdued form.
The fourth edition of The Importance of Wholesale Financial
Services to the EU Economy 2009, an annual report authored by
London Economics and published by the City of London Corporation,
shows that the sector still offers substantial benefits to
businesses and consumers in each of the 27 European member states,
even at a time of a severe global recession, with the EU still home
to some of the world’s largest and most active markets.
Stuart Fraser, Chairman of the Policy and Resources Committee of
the City of London Corporation, said: ’The key to economic recovery
in the European Union is co-operative action based on hard,
realistic measures. The City is in Brussels doing this and is
working with others, including the Government and Opposition
parties, together with the Mayor of London, and governments and
institutions throughout the EU – plus key financial stakeholders -
in order to maintain a coherent basis for long-term growth.
‘Financial services provide vital and necessary tools for
international businesses to manage finance, risk and access
investment – and notwithstanding the crisis the sector still
accounts for between a third and a half of the EU’s surplus of all
services.’
Mr Fraser added: ’Of course we need an improved, coordinated
regulatory structure to protect against systemic risk in the
financial services industry – but we also need to retain the
ability to innovate – in a properly managed and transparent way.
Getting this balance right is crucial - for the EU as a whole, and
especially Germany, France, the Netherlands, Spain and the UK,
where the financial sector is a major driver. Any proposed
regulation also needs to be evaluated to avoid unintended and
damaging consequences.’
The report presents a scenario indicating a 6% decline in the
sector in 2009 from a 2008 high (when it accounted for Euro
219bn in EU GDP and nearly 1.4 million EU jobs), a modest dip
in 2010 before a return to growth in 2011, with recent job losses
expected to be made good by 2013.
While wholesale financial services in the EU enjoyed
uninterrupted growth for most of the past decade, the current
financial crisis is patently having a profound effect on the
industry. However, the report notes grounds for optimism; the
situation is stabilising as EU firms respond to increased
competitive pressures and key business areas such as equity markets
and asset management are already showing signs of recovery.
The findings of The Importance of EU Wholesale Financial
Services to the EU Economy will be discussed at a high level
seminar in Brussels on Tuesday 1 September, where the report will
be launched. At the same event there will also be a presentation
and discussion of an earlier report (April), Assessing the
Effectiveness of Enforcement and Regulation, which examines
regulatory effectiveness amongst a number of developed economies.
The research found that despite variation in regulatory systems,
market outcomes such as cost of equity, size and liquidity of
markets, valuation premiums, listings and market cleanliness were
comparable in the developed economies examined: UK, US, France,
Germany and Australia.
Ends
Notes to editors
-
Download a copy of the Wholesale Financial Services 09
report
-
Download now a copy of April’s Assessing the Effectiveness of
Enforcement and Regulation
- For the purposes of this report, wholesale financial services
are defined as “the provision of services by financial institutions
to corporate clients, investors, institutions and public bodies, as
well as to other financial institutions.”
- About the City of London: The City of London Corporation
supports and promotes wholesale financial services and business. It
also provides local government and police services for workers,
residents and visitors to London’s Square Mile business district
and also provides valued services to wider London and the nation as
a whole including: Guildhall Art Gallery, Barbican Centre, Central
Criminal Court at Old Bailey, 4,240 hectares of open space three
wholesale food markets and acts as London’s Port Health
Authority.
- About Stuart Fraser: Stuart Fraser is Chairman of the Policy
and Resources Committee of the City of London Corporation.
View
his biography or
download a photo of Stuart Fraser
Press contacts
James Abbott
Tel: 020 7332 1754
Mob: 07831 543188
Email:
james.abbott@cityoflondon.gov.uk
Sanjay Odedra
Tel: 020 7332 1835
Mob: 07954 327370
sanjay.odedra@cityoflondon.gov.uk