Foreign banks see Emu as vital for City

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The Independent Online
INTERNATIONAL banks believe London will continue as Europe's financial capital, according to a survey out today, but only if it eventually enters economic and monetary union (Emu).

According to the London Chamber of Commerce and Industry, the UK's decision not to participate in the first wave has had no material impact on the capital's attractiveness as an international financial centre.

However, if the UK were never to join, this would detract from London's position as the centre of European financial markets, according to 42 per cent of respondents.

Simon Sperryn, chief executive of the London Chamber of Commerce, said: "London's inherent strengths are more than sufficient to overcome any problems caused by the UK's non-participation in the single currency."

David Heathcoat-Amory MP, shadow Chief Secretary, said: "London will continue to be Europe's premier location for financial services if it maintains its cost advantages and builds on its traditional strengths."

A hundred foreign banks based in the City were surveyed. The banks cited high quality telecommunications, depth of financial markets, availability of labour, tradition and political stability as the five most important ingredients for any successful financial centre.

London scored highly on all five criteria, although respondents were more scathing about the costs of doing business in London - in particular, property costs and labour costs. Neither did the capital's transport network score highly.

London's regulatory regime was regarded as more favourable than those of Tokyo, Zurich, Berlin and Frankfurt.