May 18, 2013
Wootton: 'Weigh risk vs. opportunities'
Lord Mayor of London speaks at CCAB lunch about relations
by Michael Soltys
Perhaps some harsher tongues might say that Argentina has too many problems with governance, risk and compliance for anybody to come here and talk about those subjects but that is exactly what David Wootton, the Lord Mayor of London, did yesterday at a business lunch given by the Argentine-British Chamber of Commerce (CCAB).
The Herald’s question was very much along those lines — given that the Lord Mayor’s single year in office (of which he spends about a quarter abroad) gives him time for around 20 countries and given that Argentina has acquired a somewhat dodgy reputation recently for “governance, risk and compliance” alike, what brought him here?
Despite the brevity of his own term in office, the City of London likes to take a long-term view, replied the Lord Mayor (who is not Boris Johnson while bearing a certain physical resemblance to the London Mayor — he runs the original square mile of the City of London which is now one of the world’s great financial centres). If he only has time for 20 countries, Argentina is G20, Wootton said — it is also a major agricultural power with abundant natural resources, historically the home of many British businesses and blessed with a skilled workforce.
Any business has to balance the risks against the opportunities and there certainly are (“or ought to be,” he added meaningfully) opportunities in Argentina. Wootton then admitted to “issues affecting the business climate” but addressing those issues was also a good reason for coming here — the aim was more British trade and investment here, not less.
Highlighting the recent Olympics and Paralympics as fresh evidence that London can perform “on time and on budget,” Wootton expressed his faith that the City of London could remain a top global financial centre thanks to its “unique cluster of expertise and experience.”
The City sought to set the rules as ever but faced new challenges. The rules were more complex (not least because of the European Union) — the City needed to enter into policy-making as well as law-making and acquire new communication skills. This also required a new flexibility — on compliance, City policy was now “comply... or explain.” As for risk, it had become part of the business culture everywhere.
Many new areas were commanding at least as much attention as financial services — infrastructure, design, education, the environment, creative industries, and so on. But Wootton advanced various reasons to justify his faith that the City could maintain its reputation for quality services — from the frank discussions about the LIBOR (London inter-bank offered rate) to its emergence as a leading centre for rimimbi (yuan) trading besides the euro (here Hong Kong helps).
Wootton took seriously a question about the prospect of Europe and Britain separating although he forecast that ultimately all the European Union would stay together, including Greece. The current problems had to be measured against the lack of alternatives. But political factors were always being underestimated, he insisted — the earlier term “European Economic Community” was a misnomer for a political project. In answer to another question, he said that protectionism was always a mistake in the long term.