Lord Mayor of London visits Tokyo
Sept. 5, 2018
While visiting Japan in his role as international ambassador for the UK’s financial and professional services sector, Lord Mayor of the City of London Charles Bowman joined a BCCJ luncheon in July.
His visit to Tokyo aimed to enhance UK–Japan collaboration in fintech, green finance, insurance, asset management, legal services and cyber, with five primary objectives:
- To promote confidence in London remaining the pre-eminent global centre for financial and professional services, even after Brexit
- To explore opportunities for innovation in financial and professional services
- To advance existing strong ties between the UK and Japan as well as the City and Tokyo Metropolitan Government (TMG), particularly in asset management and fintech
- To find, leverage and create business opportunities between the City and Tokyo
- To promote the City’s Business of Trust programme, with the aim of creating a legacy of better businesses trusted by society.
His visit builds on a successful Memorandum of Understanding (MoU) on closer collaboration in financial and professional services signed by the City and the TMG in September 2017, which Bowman says is “already reaping benefits.”
After a meeting with Governor of Tokyo Yuriko Koike on 9 July, Bowman signed a MoU with Tokyo Metropolitan University that will focus on cooperation with Cass Business School, one of five schools in the University of London. He also supported a new cooperation venture by the London Stock Exchange Group and backed the TMG’s Global Financial City Tokyo Initiative, which is designed to make Tokyo a top global financial centre.
UK financial strengths
Bowman says closer and deeper bilateral collaboration is possible and welcome. One area in which the City might contribute to Tokyo’s development as a financial centre is through leveraging the UK’s expertise in asset management.
Not only is the UK’s asset management sector the second largest and most international in the world, it is also growing rapidly, from £2trn of assets under management in 2004 to £8.1trn in 2017, of which £2.6trn is managed on behalf of international clients.
This growth, said Bowman, is due to “a unique concentration of industry skills and talent, a focus on long-term investment fostering growth through investor stewardship and engagement, and our world-renowned regulatory and legal systems.”
With UK asset managers active in the Japanese market as a foundation, the TMG seeks to attract a further four UK asset managers to Tokyo per year by 2020, which is being supported by the City. Discussions are also underway between Bowman and Koike on the hosting of a forum in London. This platform would allow Japan to leverage the UK’s expertise in asset management in exchange for UK asset managers gaining greater access to the Japan market—what Bowman says Koike has described as “a real win-win.”
Employing 60,000 people and bringing more than £7bn to the British economy, fintech is another of the City’s strengths that Bowman is promoting.
“Our fintech industry attracts more investment than anywhere else in Europe thanks to our welcoming regulation, favourable government policy, strong private investment and ecosystem that involves all the major players,” he said.
Maximising the City’s potential as what Bowman describes as “a one-stop shop for tech and fintech,” the City recently supported Japan’s largest bank, MUFG, to establish an innovation team in the heart of London.
“We want all financial institutions to have access to the most innovative solutions in fintech so we’re keen to attract more inward investment into Japan as well as show the message that London is a long-term partner, a secure place to invest,” Bowman explained.
In green or sustainable finance, too, the UK leads the world, he said. Between 2016 and 2018 the green finance market grew by 78% to £95bn in green bond issuances. There are 64 bonds listed on the London Stock Exchange, raising more than £155bn and the UK government recently announced plans for a green finance institute in the City.
The move builds on a visit to Tokyo by Sir Roger Gifford, chair of the City’s Green Finance Initiative and a former Lord Mayor of London, in April this year. He joined a green finance roundtable at the British Embassy. Bowman noted that Gifford’s work would “increase knowledge-sharing in green finance, so critical for a sustainable future for us all.”
Allaying Brexit fears
Bowman said the British financial services sector is “a national, European and international jewel,” while London is “the most international financial marketplace in the world.” The UK would therefore retain its dominance in the financial and professional services sector regardless of Brexit.
He pointed out that London has the leading global share of trading in many international markets. The financial and professional services sector accounts for almost 12% of the UK’s GDP, has a trade surplus of £68bn per year and employees 2.3mn people nationwide. Two thirds of Fortune 500 companies have their European headquarters in London, joined by Europe’s largest insurance market and more than 250 international banks. Moreover, financial and professional services are the UK’s largest export to Japan and there are some 65 Japanese financial firms based in London. Japan, he added, is one of the UK’s priority markets.
Nevertheless, the City is asking for a “bespoke” Brexit deal that delivers a transition period to give businesses stability, a free trade agreement that includes mutual market access and financial and professional services, and an immigration system that enables firms to secure global talent.
Whatever happens, Bowman said London would be open for business, particularly with Japan. He explained that after Brexit it would remain a global and creative city with the same fundamental ideas, including the rule of law, culture, history, talent, diversity, education, taxation, regulation, innovation, infrastructure, language and security. “These are fundamentals that are extraordinarily difficult to replicate; if [others] could they would, hitherto they haven’t, and so long as we’re not complacent they won’t,” he said.
Produced by Sterling Content for the BCCJ