Prince defends City regulation
By Andrew Edgecliffe-Johnson in Davos
January 30 2009
Bernard Madoff's alleged $50bn (£34.9bn) fraud could not have happened in London, according to Prince Andrew, who claimed yesterday that the UK's system of “principles-based” regulation was not broken.
“Madoff couldn't happen in London. It could never get to that scale,” the Duke of York told the Financial Times at the World Economic Forum in Davos. The fact the UK had avoided the more rules-based US system meant that while fraud could still happen, “we would have bowled something like that a lot earlier.”
Prince Andrew, who serves as the UK's special rep-resentative for international trade and industry, said the City of London was well regulated, in spite of the financial crisis.
“There are failings in the regulatory system but that’s less to do with the regulations themselves than the application of the regulations,” he said. The UK remained “the world's greatest place for international finance”, he argued, noting that the attractions of London’s time zone, language and skilled workforce had not changed. The Duke said the government had asked him to step up his work representing British businesses abroad.
He disputed the claim by Jim Rogers, the commodity investor, that the UK now had nothing to sell as North Sea oil ran out and the City’s status was in question. “He’s technically correct on the North Sea . . . but, my God, we have a huge expertise in marine oil development,” the Duke said. The banking system was in “a bit of a mess, to put it mildly”, but its insurance and legal sectors were not broken.
The Duke said he was worried that protectionism could threaten international trade, if stimulus packages imposed restrictions on business. The government was listening to business, he said, but “the problem is whether government’s actually getting the policy right when it regurgitates what it's heard”.
Copyright The Financial Times Limited 2009
