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The Duke of York’s speech at the Lloyds of London Dinner, New York, 23rd June 2009

Good evening Ladies and Gentlemen

It is a great pleasure to be with you this evening at the very kind invitation of Lord Levene and Lloyds of London.

I am, as always, delighted to be in New York as the UK’s Special Representative for International Trade and Investment. Everybody knows that our two countries have a unique and special relationship, which covers a variety of fields, not least with US investment in the UK sustaining over a million jobs and the British Investment in the US sustaining a million jobs. Within this relationship our two cities – New York and London – are the globally eminent locations for the financial services industries and, as such, are the engines for growth for much of not only our economies but also across the globe.

The UK is a destination of choice for global financial services firms and multinational businesses seeking to raise and invest capital effectively. It is the home to 45% of the world’s top insurers, 67% of asset managers and 55% of global IPOs. Financial Services has played a vital role in the UK economy, providing employment and servicing the financing needs of businesses and citizens across the economy. Financial Services does not only mean London. As far as the UK is concerned it has a far reach across the UK – 70% of jobs in the financial services industries are outside London.

However, there is no denying that we are living in exceptional times. It could be said that the capitalist model has been shaken to its core and the major financial centres of the world are still suffering the after shocks.

In the period since June last year, we have seen hugely significant economic and political events in the US, UK and beyond. We have witnessed the nadir of the worst economic crisis since the 1930s, we have seen corporate collapse, nationalisation, unemployment rising, the danger of inflation or stagflation. The list goes on. Whether there is any sight of recovery remains to be seen, but one thing is certain – that is our economic environment has changed forever.

I am not here to dwell on the past. I believe we must now start to look to the future. In the UK, in April, the number of loans for home purchases was up 16 per cent on the previous month. And a leading economic research group declared that the recession in the UK passed through its trough in March.

In America, Tim Geithner has recently said that there are “encouraging signs” in the economy, with some signs that demand and confidence are rising.


He added that “the force of the global storm is receding a bit”. Data from international bodies seems to bear this out.

OECD figures for April indicate a slowing in the deterioration of most economies and what they say are “stronger signals” of possible trough in Canada, France, Italy and the United Kingdom.

The last few months have seen a mixed bag – January saw record lows for banking shares, and yet there has been cause for hope since then.

President Obama’s vision of hope – ‘Hope in the face of difficulty. Hope in the face of uncertainty. The audacity of hope.’ I believe this is as relevant to the financial services sector as it is to the political arena.

Coming back to our two cities, it was only two years ago, when Lloyd’s first began its City Dinners, the media were in some sense obsessed with the contest between London and New York. Some examples of headlines included:

‘The City vs Wall Street – The Smart Money is on and in London.’ FT, 26 January 2007

‘Is New York No Longer the World’s Financial Capital?’ NY Magazine, 26 March 2007

Now we are in very different market circumstances and we have moved from contest to co-operation – something which has been very evident from my meetings so far and the attitude and discussions with everyone I have met.

London and New York are two great cities from which we herald and are joined together tonight. They remain financial beacons for their respective nations, but we must recognise that significant changes need to be made.

I believe that together we must combine the best of our respective skills in drive, entrepreneurial spirit, energy and pace. We need to use these attributes to work together to put in place a new architecture to support future growth. Basically, we need to address shortcomings and to stimulate a recovery. In doing this we must be careful to ensure that the capital markets are regulated in a manner to allow them to perform the important functions that they play across the world and we must ensure that future steps do not kill the very markets that support global trade.
I am certain that the right way forward is for industry, regulators and legislators to spend time discussing the issues and collectively making sure that the right steps are taken.

Around this room this evening are a good selection of leaders in the Financial Services Sector – perhaps a recognition that through your leadership in engaging with the Regulators and the Legislators those future steps can be taken to produce a better, more effective and insightful regulation.

London and New York remain the top two global financial centres. It is clear that we are both retaining these positions and showing resilience in the face of this financial storm.

Whilst there is no safe haven in the current financial turmoil we do see a ‘Flight to Safety’ – people are putting their faith in well established financial centres. This is, I believe, an opportunity for London and New York.

Tonight’s dinner illustrates, for instance, the crucial role that the Lloyds Insurance Market continues to play on the global stage and especially in the US. It has survived for over three centuries by sticking to a mantra of prudence and risk management.

There is no denying the scale of the challenges that we face. With the undoubted collaboration between the Finance Centres of London and New York and the engagement between the Financial Services Sector, Regulators and Legislators, the future steps to develop and increase our nations prosperity through a sound Financial Services system will be achievable.

Lloyds of London Dinner
New York
23rd June, 2009

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