London worst place to do business: Bankers

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IANS | 06 Feb, 2012
The continuing row over bonuses is damaging Britain's reputation as a place to do business, leading international bankers has warned.

Ministers have been accused of trying to gain public favour this week by stripping former RBS chief Fred Goodwin of his knighthood and pressurising current RBS chief executive Stephen Hester to reject a 1 million pound bonus, Daily Mail reported.

One senior executive at a Wall Street bank told The Times: "London is now the worst major centre in the world to do banking."

The anti-banking bandwagon is only set to worsen in the next few days with the bonus announcement of Bob Diamond, Barclays chief executive.

Directors of privately-owned banks are concerned public pressure will be put on them to reduce or reject annual bonuses in the light of Hester's decision to waive a bonus this week.

Investment banker Nicola Horlick, a university friend of Hester has warned against a "witchhunt" towards bankers.

"You shouldn't underestimate the importance of financial services to the country," she told The Times. "Without it we would be in dire straits. Let's not kill the golden goose that saved the country."

Hester, chief executive of the 82 percent publicly-owned Royal Bank of Scotland was the subject of sustained calls from government ministers and Ed Miliband, the Labour leader, to relinquish a bonus at such a politically-sensitive time.

The fear is that banks will leave the City of London altogether, in favour of more favourable treatment in Asia or America -- a move which would be catastrophic for the British economy in terms of jobs and investment, the Mail added Saturday.