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Comment by carnitine | Hacker News Reader

I don’t really understand the regional inequality point. Obviously the City is uniquely rich and full of investment amongst places in the UK, but that is because we are fortunate enough to have one of the world’s foremost financial centres. Most firms in the City view Paris and Zurich as their alternatives, not Manchester and Birmingham, and I don’t see how that can be changed.

I think the country is much better off with the City than without it and to some extent we must be accommodating of it, not bending it to our will.

Disclaimer: written from my desk within the City.

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The City is one of the world’s foremost financial centres exactly because of what went on under the carpet in the last 30 years… call it accounting proficiency in the beginning, facilitation next, hedging and venturing in the end. Of course, all kind of customers felt increasingly safe to do any sort of business, which started being exposed to the general public 15 years ago, the night Barclays almost went under, HSBC got caught with their trousers down, and Gordon Brown had to save the day in order not to declare systemic bankruptcy. The UK financial industry hugely benefitted from being half in, half out the EU… call it fortune, if you want.

Much longer than 30 years- the City of London has been globally significant since Tudor times, and have been a political entity for over a thousand years - it’s still run along quasi-medieval lines.

The City of London is a byword for the businesses that operate there.

Everything else, apart from its value as real estate, is just a historical curiosity...it doesn't matter

> The City of London is a byword for the businesses that operate there.

Great example of synecdoche (rhymes with Schenectady)

I guess it's a game theory kind of thing. If, for some reason, the UK decided to clean their act, the grifters would go someplace else (delaware, singapore, etc). In the end it might make the world a slightly better place but at an important cost for the city types.

However, it would mean that part of the local investment might flow back into local business/industry, making the country also slightly better off and with less inequality there might also be less corruption. Your average politician would spend less time being a mercenary for the city and more time dealing with actual problems.

My layman's understanding is this: having a single dominant industry like finance causes high demand for the pound, raising the price. This is terrible for exports, as producing industries have to compete with countries with more beneficial exchange rates. This is also known as Dutch disease.

> I think the country is much better off with the City than without it

Possibly, but here the perception of tax avoidance and perception of corruption matters, as well as the ability of people on City salaries to outbid everyone else on housing.

Ultimately the City is still subject to UK law and UK voters, and the more depressed towns pile up the more likely something drastic and probably counterproductive is going to be "done about" the City.

I am not sure why someone in Manchester gets so upset that someone in London is helping launder an African dictators dirty money, as if it is directly making their life miserable.

If everyone paid their 'fair share' down London way it wouldnt change a thing.

> I am not sure why someone in Manchester gets so upset that someone in London is helping launder an African dictators dirty money

As the saying goes, we live in a society.

They get their kickbacks up north and then some. Occasionally they even get a dictator to chuck some money in to support the local football team as well.

Because this foreign miney is inflating the real estate buble making housing unaffordable.

Because financialisation has caused stock market and GDP to become detached from the real productive economy.

Because maybe they think the finance industry should be investing in real infrastructure or something productive.

On the other hand there is an argument that financial services are too large a part of the UK economy, that they soak up talent in a way that impacts the rest of the UK and influence exchange rates so that other businesses have become less competitive in international markets. Somewhat like Dutch disease.

Totally agree on this point. As an American who spent the last year working in Westminster this was always something I never understood.

It's called Dutch disease. The financial center has a distortive effect on the allocation of resources in the country, including talent.

"Most firms in the City view Paris and Zurich as their alternatives ..."

Is this true ? Genuinely curious since you work in The City.

I was under the impression that New York was 1, London was kind-of-sort-of 2 and Frankfurt was either 2 or 3 ...

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> world’s foremost financial centres

Best "tax evasion as a service" since City of London uses laws as obscure as if they came from some fantasy book.

Name three of these laws.

* Decisions made at a desk in London are marked as made elsewhere, e.g. tax haven, so no CIT paid

* trusts excluded from information exchange processes, effectively unknown beneficial owner

* No reporting of capital reserves to nobody, so laws like Basel II literally dont exist, as long as the pseudo bank is on some island (yet all operations are in City)

* "If I believe it looks like a bank, then it is a bank"

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