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Levene defends UK financial services

Lord Peter Levene, chairman of Lloyd's, has lambasted those who question whether the competitiveness of the City should take precedence in the UK, insisting it is "an absolute priority" and should be a central concern in the current debate on rewriting the financial rulebook.

Speaking at the Lloyd's City Dinner on 17 September, Levene described the City - the banking and insurance hub of London - and the wider financial industry as "vitally important" to the UK economy. He added: "Can you imagine the French, German or Swiss governments questioning the importance of the competitiveness of their wine, automotive and pharmaceutical industries? No… and neither can I."

"Competitiveness demands excellence, and continued excellence requires constant change and evolution. This must be our priority now. Not knee-jerk reactions, pandering to populist outrage or driven by ideological opportunism, as is the case with the proposed EU directive on alternative assets," he said.

Levene called for "careful and measured remedies" that take into account the diversity of the UK financial industry and that do not damage "healthy and vibrant sectors, of which insurance is top of the list".

Guests heard that the UK financial services employ more than one million people - and that more than two-thirds of those jobs are situated outside London. The sector accounts for about 8 percent of national output and contributes some 14 percent of total tax revenues to the country.

And while the irresponsible behaviour of the banking industry clearly demands "significant change" in both regulation and governance, Levene insisted this was "certainly not a reason for politicians and policymakers to start undermining the UK financial sector".

"There is a very real danger that we shall end up doing irreparable damage to one of the strongest sectors of our economy," he warned.

Levene stressed that due to the high level of international business conducted in the City, it is "nonsensical" for politicians and others to suggest that the UK financial sector "is somehow 'too big'" for the UK economy.

"The UK is an international leader in financial services - a high value-added part of the global economy - and that gives us a tremendous competitive advantage," he said. Levene added that the international dynamic is "crucial", in that much of the value added remains in the UK.

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