If you can measure the extent of your success by the vitriol of your enemies, the City is doing well
Last month, Christine Lagarde, the French finance minister who has been advocating La Défense as a chic continental alternative to the square mile, went on the attack.
Lagarde told The Figaro that ‘foreign banks’ (AKA. banks in the City of London) simply aren’t “playing the game” when it comes to paying traders. Most particularly, she said they’re splashing out on guaranteed bonuses after the French Banking Federation (FDF) explicitly outlawed such things.
Her complaints were echoed by FDF president Georges Pauget. “We opted for a one year ban on guaranteed bonuses,” Pauget told L’Agefi. “If others don’t follow before the next G20 meeting in the autumn, we can’t stay separate from market realities.”
Guaranteed bonuses may seem fantastical to anyone out of a job. But they’re becoming mandatory if you want to hire senior revenue generators in London.
After a bad 12 months in which prospective tax increases and big job cuts dealt blows to the City’s appeal, the resumption of guarantees is helping to make London cool again.
The City’s cause is furthered by currency depreciation and falling house prices. According to Mercer’s cost of living index, London was the third most expensive city in the world for expats in 2008 and the second most expensive in 2007. This year it ranks 16th.
Can the City remain resurgent? Yes, if it manages to sidestep efforts to bring it into line with the rest of Europe. Unfortunately, this isn’t assured: proposals to subject the City to European majority voting on financial regulations, could yet see the likes of guaranteed bonuses outlawed in the Square Mile as well as La Défense.