Bob Wigley welcome speech at the Annual Dinner


Speaking this evening at UK Finance's Annual Dinner in London, Bob Wigley, Chairman of UK Finance said:

Minister of State, My Lords, Ladies and Gentlemen, welcome to this UK Finance annual dinner. I am Bob Wigley, Chairman of UK Finance. Given all we have been through over the last 2 years, its fabulous to be ?here? with all of you, not on some dreadful Zoom. Thank you for coming.

I would firstly like to thank EY, not just for sponsoring this evening's dinner, but for their continued support across a number of important workstreams with our members.

The last 2 years have been amongst the most challenging of our lives, so tonight I want to speak from the heart and give you my personal analysis of the state of financial services, and end with an upbeat message about our industry's bright future; arguably the UK's foremost industry, operating as it does in this great City of London and across our wonderful United Kingdom.

Ten years ago, our industry had a bad global financial crisis. We were rightly pulled up on our attitudes to risk management, liquidity planning and at the heart of this was a leadership and cultural deficit.

Whilst not denying there is always more we can do, we have come a very long way since then!

I was asked to speak at a school recently, and a 16-year-old asked how confident I was that the regulatory and governance changes made since 2008 would prevent the next financial crisis. What a brilliant question from a 16-year-old. I said I was very confident that if the causes of the next potential crisis were the same as the last one, the changes made would prevent it. I will return to his follow up question and my answer to it later.

But for now, I want to focus on strategic considerations for our industry, our recognition of the need for purpose, the opportunity sustainable finance represents, our progress on diversity, and lay out some challenges for the Government on enhancing our international competitiveness.

Everyone in this room should be incredibly proud of the swift, responsible, and enormous reaction of our industry to supporting consumers and businesses through the pandemic. It's for others to judge whether we had a good crisis, but most commentators seem to acknowledge that the finance and banking sector really stepped up to support households and businesses.

Today UK Finance is closely engaged with our members to define our industry's purpose - not winning the quarterly earnings race, but serving the needs of households and businesses across the UK and financing a just transition to net zero. A just transition means that the climate change crisis can only be addressed with our industry financing it - and recognising that the (inaccurate) perception that the benefits of this investment is seen only in the South East. Our industry needs to be seen to support the Government's levelling up agenda to reflect more appropriately our regional and diverse customer base.

Whilst on diversity, I speak to you as a chairman of a gender balanced board. Given I made it a condition of being Chairman that our board could only be CEOs, that is a truly remarkable achievement - partly borne of the Women In Finance Charter which we masterminded with HMT. It was achieved though having specific objectives on senior female appointments, CEO accountability, transparency of reporting of related KPIs....this approach works. And it will work again on sustainable financing. We do of course need to up our game in other areas of diversity and we will.

Several years ago, I wrote a report for Boris when he was Mayor laying out the 40 or so factors which led to London being a leading global financial centre. I reread it yesterday. Happily what struck me was that many of the factors including our tax, regulatory and legal systems, language, time zone, professional services ecosystem, deep talent pool and must go-to road show destination status are not fundamentally threatened by COVID or Brexit. And our government is telling a good story on revisiting our regulatory regime post Brexit to improve it further. Let me now lay out some very specific challenges for them.

It was great to hear the Chancellor acknowledge both retaining clearing and settlement in London and not losing the argument on delegated portfolio management in his last Mansion House Speech. These are the two Achilles heels which could yet lead to job leakage to the Continent rising nearer to the worse case estimates made at the time of Brexit. Government needs to maintain relentless focus on winning these arguments as the Commission's longer-term objectives are clear.

Turning to tax, Government has had to raise taxes on companies to fund pandemic borrowing. Partly because of our robust advocacy, the Government has recognised that banks need reasons to be in London not reasons not to be. We have a deeply internationally uncompetitive corporate tax rate due to the hangover of the bank levy and surcharge - so I thank the Chancellor for his action in his recent Budget which will mitigate the impact of tax rises on our industry - but implore him to maintain vigilance in ensuring our nation and financial services sector is competitive internationally. I believe his leadership on a minimum global corporate tax rate is genius.

We welcome the Government's approach to reviewing our wider regulatory regime to make sure it is fit for purpose post Brexit We welcome the Hill and Kalifa reviews but we look forward to them being speedily converted into regulatory and legislative change. We would like to see regulators have more focus on promoting competitiveness, not just safety and soundness, by for example, moving to proportional regulation of our mid- tier and smaller banks. Finally, we need to be at the forefront of applying the principles of same risk, same regulation to our big tech friends who are increasingly moving into our business, but without the history of being regulated.

I had no idea UK Finance was so involved in fighting economic crime when I took this job. 40 per cent of all reported crime in the UK is fraud and it's rising exponentially, costing our industry hundreds of millions a year. And whilst I remain shocked about the level of international financial crime we host in the UK, despite our best efforts, we do need to have perspective. We have without a doubt the best public private partnerships in the world with Government on tackling economic crime. We share the Government's objective of being seen to be the safest and most transparent major financial centre in the world. At our instigation, we now have a joint public private threat assessment, joint public private economic crime plan and I am working tirelessly with David Postings, the Home Secretary, Security Minister, and our economic crime team to ensure we create an anti-fraud plan for the UK which is the best in the world. In this context, I call on the Government to be much more ambitious on E-id and the industry stands by to support such an agenda. In his speech, David will lay out some of the measures we are taking and he is leading to reduce cost to the industry and reduce fraud on consumers.

I want to quickly revisit the 16-year-old who asked me that brilliant question. His follow up was, 'so what will cause the next crisis??. I said I wish I knew, but potentially one of two things. A massive cyber-attack, which saw a major bank or potentially more than one not able to function for a period leading to a loss of confidence. In that regard, I am delighted by the success of the Financial Services Cyber Collaboration Centre which we have established and the work David leads at the Cross Market Operational Resilience Group at the Bank to address such potential scenarios. The second I identified was climate change, which is why it was so impressive to see the massive support which came from UK banks for the net zero banking alliance that underpinned the vision the Chancellor outlined at COP 26. That said, if I was Mayor of London, given the trend in London flooding, I would be very focused on building a second flood barrier urgently.

Ladies and Gentlemen, I want to finish on a very positive note. I believe our industry has come a long way since the GFC, we have a renewed sense of purpose, we have made real progress on diversity and inclusion, we were seen to act responsibly and forcefully to the pandemic, we are making more than our fair contribution to taxes and to tackling economic crime. In short, I am incredibly proud to represent our industry and very optimistic about its prospects. I believe in David we have an excellent new Chief Executive who is making substantive progress on tackling some long-seated issues. Ladies and Gentlemen, I ask you to be upstanding and raise a glass to the future prosperity of our finance and banking industry and a continuing close collaboration with Government to ensure we retain our world leading position.